TaxTMI 
TaxTMI 
2022 (9) TMI 253
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....ashtra. The Applicant No. I alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price. 2. The DGAP in his Report dated 29.01.2021, inter-alia stated that: i. The Maharashtra State Screening Committee on Anti-profiteering examined the said application and forwarded the said application with his recommendation, to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the Rules. ii. The aforesaid reference was examined by the Standing Committee on Anti-profiteering in his meeting held on 13.09.2019 and vide minutes of meeting received by the DGAP on 09.10.2019, it was decided to forward the same to the DGAP, to conduct a detailed investigation in the matter. iii. On receipt of the reference from the Standing Committee, a notice under Rule 129 of the CGST Rules, 2017 was issued by the DGAP an 23.10.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the ....
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....ional office forwarded the pending documents vide letter dated 09.12.2020. Further, the Respondent also submitted the required details vide e-mail dated 03.12.2020 and 07.12.2020. ix. Vide e-mail dated 12.01.2021, the Applicant No. 1 was given an opportunity to inspect the non-confidential evidences/reply furnished by the Respondent, on 15.01.2021 or 18.01.2010. The Applicant No. 1 replied vide e-mail dated 12.01.2021 and informed that he was staying abroad and requested to share the non-confidential documents submitted by the Respondent on e-mail or WhatsApp. Since, the Respondent had declared all the documents as confidential, an e-mail was sent to the Respondent on 12.01.2021 to provide the summary of confidential and non-confidential documents. However, the Respondent failed to submit the summary of confidential and non-confidential documents, and declared all the documents as confidential and thus the same were not shared with the Applicant No. 1. x. The period covered by the current investigation was from 01.07.2017 to 31.03.2019. (Restricted to 31.03.2019, as the Respondent opted for new scheme in terms of Notification No 03/2019 (Central Rate) dated 29.03.....
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....icable from 01/08/2017) HDFC Bank 50200026330972 Erroneously kept common account for Garden Avenue K3 & K4 as there was no clarity regarding accounts till then and same was accepted at time of RERA Registration 21/07/2018 to 28/03/2019 Kotak Mahindra Bank 8612417049 Opened separate account after necessary clarifications 29/03/1019 to till date HDFC Bank 50200026330972 Opened new accounts as project was mortgaged Project Name:- Garden Avenue K-4 31/07/2017 To 20/07/2018 (Note : RERA was applicable from 01/08/2017) HDFC Bank 50200026330972 Erroneously kept common account for Garden Avenue K3 & K4 as there was no clarity regarding accounts till then and same was accepted at time of RERA Registration 21/07/2018 to 28/03/2019 HDFC Bank 50200026330972 Opened account with Kotak Mahindra Bank as above for K3 and kept this account for K4 29/03/2019 to till date HDFC Bank 57500000324922 Opened new accounts as project was mortgaged c. Most of the work of the Project "Garden Avenue K-4" was completed before July, 2017 and hence no substantial cost incurred towards the Project after implementation of GST, on which ....
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.... project "Garden Avenue K-4". xiv, All the details/ information submitted by him was to be treated as confidential except the documents related to the Applicant No. 1 in terms of Rule 130 of the CGST Rules, 2017. xv. The reference received from the Standing Committee on Anti-profiteering, various replies of the Respondent and the documents/evidences on record had been carefully scrutinised. The main issues for determination were: a. Whether there was benefit of reduction in the rate of tax or ITC on the supply of construction service by the Noticee, on implementation of GST w.e.f. 01.07.2017 and if so, b. Whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the CGST Act, 2017. xvi. Another relevant point in this regard was para 5 of Schedule-III of the CGST Act, 2017 (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) which reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". Further, clause (b) of Paragraph 5 of Schedule II of the CGST Act, 2017 reads as "(b) construction of a comple....
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.... on value), vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018 (in respect of affordable and low-cost house upto a carpet area of 60 square meters). Further, vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019, GST on construction service in respect of affordable and low-cost houses upto a carpet area of 60 square metres was 1% and no ITC was eligible under the said notification. xviii. Further, the contention of the Respondent that the Applicant No 1 belongs to the project '`Garden Avenue K-et" which was registered under the separate RERA registration no. P99000004018 appeared to be correct and it had been verified from the documents submitted by the Respondent that "Garden Avenue K-4" and "Garden Avenue K-3" had separated RERA registrations. As per Respondent submission, the Respondent maintained the separate bank accounts for both the Projects "Garden Avenue K-4" (RERA Reg. No. P99000004018) and "Garden Avenue- K-3") (RERA Reg. No. P99000007110) as per the provisions of RERA Act, 2016 21.07.2018 onwards. Since the Respondent had submitted that he were having separate RERA registrations and separate bank accounts for both the Projects, the....
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.... 7. Relevant ITC [(G)= (A or B)*(F)/(E)] 28,47,816 12,85,177 8. Ratio of CENVAT/ ITC ((H) = (G)/(D)] 1.03% 0.63% From the above Table-'A', it was observed that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 1,03% and during the post-GST period (July, 2017 to March, 2019), it was 0.63%. This showed that post-GST, the Respondent had not benefited from any additional ITC and in fact, the ITC availed by the Respondent post introduction of GST was lower by 0.40% [1.03% (-) 0.63%] of the turnover, compared to the pre-GST period. xxi. There was no additional benefit of ITC, on implementation of GST w.e.f. 01.07.2017, the provisions of Section 171 of the CGST Act, 2017 was not attracted. 3. Therefore, the DGAP has concluded that:- i. The allegation was that post implementation of GST, the benefit of ITC was not passed on by the Respondent by way of commensurate reduction in the price, to the recipients. However, as discussed above, there was no benefit of additional ITC that accrued to the Respondent post introduction of GST. In fact, the ITC as....
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....e ITC. On the issue of reduction in the tax rate, It is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post GST period. Hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue, the DGAP In his Report, has stated that ITC as a percentage of the turnover which was available to the Respondent during the pre-GST period (April-2015 to June-2017) was 1.03% and during the post-GST period (July-2017 to March-2019), it was 0.63%. On this basis, the DGAP has concluded his Report with the findings that the Respondent had neither been benefited from additional If nor there had been a reduction in the tax rate in the post-GST period for the Project "Garden Avenue K-4". 8. The Authority also finds the Applicant No. I vide his above submissions has also stated that he has satisfied with the findings in the DGAP's Investigation Report dated 29.01.2021. 9. In view of our above facts the Authority has no reason to differ from the Report of DGAP and we therefore agree with his findings since there was no reduction in the rate of tax nor there was increased additional ben....