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2022 (10) TMI 369
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.... amounting to Rs. 1,77,50,478/- had been blocked by the State GST authorities on 28.03.2019. ii) Whether the above amount of ITC should be taken in to account while computing the profiteered amount during the period from 01.07.2017 to 31.03.2019. iii) Whether the Respondent had passed on the benefit of Rs. 9,61,130/- as ITC benefit to the shop buyers during the period from 01.07.2017 to 31.03.2019. iv) Whether the Respondent had passed on an amount of Rs. 95,205/- as ITC benefit to the Applicant No. 1. 2. The DGAP vide report dated 24.09.2019 reported that an application dated 29.11.2018 was filed before the Standing Committee on Anti-profiteering, under Rule 128 (1) of the CGST Rules, 2017 by the Applicant No. 1 alleging profiteering in respect of construction service supplied by the Respondent. The above Applicant had submitted that he had purchased Shop No. G-122 in the Respondent's commercial project "U FARIA", situated at C-04A, Sector-16B, Greater Noida, Uttar Pradesh and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in price of the shop. The above application was e....
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....00% 8,59,591.00 + 92,463.00 9,52,054.00 3. On casting of foundation Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 4. On casting of Ground floor slab Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 5. On casting of 2nd floor slab Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 6. On casting of 4th Floor roof slab Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 7. On completion of Structure (Retail) Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 8. On completion of Brick Work Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 9. On Start of Finishing Work Basic 10.00% + Commercial PLC 10.00% 8,59,591.00 + 92,463.00 9,52,054.00 10. On offer of Possession Basic 10.00% + Interest Free 100,00% maintenance Security + Commercial PLC 10.00% + Sinking Fund 100.00% + Dual Meter charge 100.00% 8,59,595.00 + 62,900.00 + 92,463.00 + 66,900.00 + 20,000.00 10,97,858.00 Total Consideration (R....
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....d from the Home Buyers list submitted by the Respondent. The Respondent has also contended that the ITC utilized post-GST should be considered for calculation of profiteering. The DGAP has observed that in all the investigations done in such cases, the figure of ITC availed was taken and not the ITC utilized. Further, the unutilized credit out of availed, would be utilized in future to set off the tax liability by the Respondent. v. The DGAP further reported that prior to 01.07.2017 i.e. before the GST was introduced, the Respondent was eligible to avail credit of Service Tax paid on the input services but credit of CENVAT on Central Excise Duty was not available in respect of the commercial shops sold by him. The Respondent was also not eligible to avail ITC of VAT paid on the inputs. However, post-GST, the Respondent could avail ITC of GST paid on all the inputs and input services. The DGAP has analysed, from the data submitted by the Respondent, covering the period from April, 2016 to March, 2019, the details of the ITC availed by him, his turnover from the project "U Faria" and computed the ratio of ITC to turnover, during the pre-GST period from April, 2016 to June, 2....
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....of Increase in ITC: 6. Base Price raised during July, 2017 to March 2019 (Rs.) E 127,174,836 7. GST raised over Base Price (Rs.) F=E*B 15,260,980 8. Total Demand raised G=E+F 142,435,816 9. Recalibrated Base Price H=E*(1-D) or 98.26% of E 124,961,994 10. GST @ 12% I=H*B 14,995,439 11. Commensurate demand price J=H+I 139,957,433 12. Excess Collection of Demand or Profiteering Amount K=G-J 24,78,383 viii. The DGAP claimed from the Table-'C' that the additional ITC of 1.74% of the turnover should have resulted in commensurate reduction in the base prices as well as cum-tax prices. Therefore, in terms of Section 171 of the CGST Act, 2017, the benefit of such additional ITC was required to be passed on to the recipients. ix. The DGAP also claimed that from the above calculation explained in Table-C, on the basis of the aforesaid CENVAT/ITC availability pre and post-GST and the details of the amount collected by the Respondent from the Applicant No. 1 and other shop buyers in respect of the commercial shops sold by the Respondent, during the period from 01.07.2017 to ....
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....he Authority and vide I.O. No. 16/2020 dated 20.04.2020, directed the DGAP to further investigation in the said matter on the points as mentioned above. Therefore, the DGAP vide Report dated 29.10.2020 has stated that:- a. The time limit to complete the investigation was upto 19.07.2020, as per Rule 129(6) of the CGST Rules. However, in light of Covid-19 pandemic, the investigation could not be completed on or before the above dates due to force majeure. Accordingly, this Report was being furnished in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020, as amended vide Notification No. 55/2020 dated 27.06.2020 and 65/2020-Central Tax dated 01.09.2020, issued by the CBIC. As per which, the last date for submission of Report had been extended upto 30.11.2020. b. On receipt of the aforesaid order from the NAA on 14.05.2020, a letter dated 26.05.2020 and further letter/email dated 30.06.2020 and 06.10.2020 were issued to the Respondent calling for the details of documentary evidence amounting to Rs. 1,77,50,478/- claimed to be blocked by the State GST authorities; details and documentary evidence of passing on of the benefit of ITC to the shop buyers in....
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....id ITC at any stage of investigation. Therefore, the contended ITC was legally available to the Respondent and hence, the same could be utilized, once unblocked, as in the present case. Further, the period of investigation was from 01.07.2017 to 31.03.2019. The credit was blocked by concerned jurisdictional SGST authorities provisionally on 28.03.2019 only for non-compliance of provisions. This credit was practically available for utilization to the Respondent, practically for the entire period under investigation. Therefore, the claim of the Respondent to exclude the ITC of Rs. 1.77 Crores from the profiteering computation was not acceptable. Thus, the Respondent had benefitted from the additional ITC, which was required to be passed on to the shop buyers. g. The Respondent had submitted copies of Credit notes issued to his 90 shop buyers alongwith summary of the same. The total amount of benefit that was claimed to be passed on by the Respondent was Rs. 9,61,130/-, including the Applicant No. 1. h. To substantiate the Respondent's claim of passing on of benefit, email dated 08.10.2020, 09.10.2020 and 12.10.2020 were sent to the Applicant No. 1 and 55 other shop ....
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.... a) During the period July 2017 to Mar 2019, ITC of Rs 1.77 Crores was lying blocked and once any ITC was blocked, it could not be considered for profiteering at all. During the said period it could not be said that the said ITC was available to the Respondent. The assertion made by DGAP that such credit 'was' available or 'is' available to the Respondent was absolutely erroneous when it had been blocked during the very period. The whole formula of profiteering was based on the availability of ITC. Once the ITC itself was not available how it could be used for calculation of profiteering. When it was known during the period that certain ITC had been blocked by the Govt Agency, it could not be referred as ITC benefit. It appears to be a misleading statement. Unblocking of ITC by the SGST department at that stage was irrelevant, as he might not be able to use that ITC at all and even otherwise that could at best be made part of ITC in the current regime. Therefore, requested that the profiteering be calculated again as the company never availed or utilised the amount of Rs 1.77 Crores blocked by the department during the said period. b) The confirmations taken by the....
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....minimum quorum was restored only w.e.f. 23.02.2022 and hence the matter was taken up for proceedings vide Order dated 24.02.2022 and the Respondent as well as the Applicants were given an opportunity to be heard in person via video conferencing on 29.03.2022. However, the respondent vide letter dated 28.03.2022 requested for adjournment. The next date of hearing was scheduled to be held on 29.04.2022 via video conferencing. However, the respondent vide his email dated 29.04.2022 requested to decide the matter on merits. No one appeared on behalf of the Applicant. The hearing was closed vide order sheet dated 02.05.2022. 7. The Authority has carefully considered the Reports filed by the DGAP, all the submissions and the documents placed on record, and the contentions raised by the Respondent vide his written submissions. It is clear from the plain reading of Section 171 (1) that it deals with two situations: - one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the 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 ta....
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....rovisions of Section 171 of the CGST Act, 2017. The issue contained in the instant matter is being decided on merit on the given facts and position of law existing today. (c) The Respondent has contended that the fresh negotiations/bookings on or after 01.07.2017 shall be excluded from the calculation of the profiteering amount. The Authority finds that, there is no evidence on record that, from 1.07.2017 onwards i.e. after the introduction of GST and availability of additional ITC, the Respondent has decreased the price of the units to be sold by him commensurate with such availability of additional ITC as mandated by Section 171 of the CGST Act, 2017. Hence, such submission made by the Respondent is untenable. The Respondent has benefitted with additional ITC only after the introduction of the GST. This additional benefit of ITC pertains to the entire project or in other words, relates to each shop/unit of the project of the Respondent. Hence all unit/shop buyers are eligible to get their due benefit of ITC from the Respondent irrespective of their bookings made in pre-GST or post-GST period. d) The Respondent has raised a contention that instead of the....
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....unt profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ payment, as per provisions of Rule 133 (3) (b) of the CGST Rules, 2017. 12. The complete list of shop buyers/customers has been attached with this Order, with the details of the amount of benefit of ITC to be passed on along with interest @ 18% in respect of the project 'U- FARIA' of the Respondent as in the Annexure-'A'. 13. This Authority also orders that the profiteered amount of Rs. 24,78,383/- for the project U- FARIA' along with the interest @ 18% from the date of receiving of advance from the shopbuyer till the date of passing the benefit of ITC shall be paid/passed on by the Respondent within a period of 3 months from the date of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017. 14. It is also evident from the above narration of facts that the Respondent has denied the benefit of ITC to the customers/flat buyers/recipients in his Project 'U-Faria' in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. Section 171 (3A) of th....
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....reening Committee in case the remaining benefit of ITC is not passed on to them. 19. Further, since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects executed under the same GSTIN. The Authority has reasons to believe that the Respondent may have resorted to profiteering in the other projects also and hence, it directs the DGAP under Rule 133 (5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of Section 171 of the CGST Act, 2017 and submit complete investigation report for all the Projects under this single GST Registration. 20. Further, the Hon'ble High Court of Delhi, vide its Order dated 10.02.2020 in the case of Nestle India Ltd. & Anr. Vs. Union of India has held that :- "We also observe that prima facie, it appears to us that the limitation of period of six months provided in Rule 133 of the CGST Rules, 2017within which the authority should make its order from the date of receipt of the report of the Directorate General of Anti Profiteering, appears to be directory in as much as no consequenc....
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.... Mrs. Malini Bahl S-248 4606 35 Mr. Sarvesh Kumar Sharma S-251 6286 36 Mr. Rajneesh Gupta S-255 8563 37 Mr. Pankaj Kumar S-262 8563 38 Mr. Gagan Saini S-263 8563 39 Mrs. Deepanshi Tyagi S-287 9094 40 Mr. Sanjeev Saxena S-315 6921 41 Mrs. Suman Vishnoi S-323 6516 42 Mr. Anil Kumar S-330 6516 Mr. Satendra Kumar 43 S-345 7667 Varshney 44 Mr. Kamal Sharma S-346 8179 45 Mrs. Renu Gupta S-366 4341 46 Mrs. Seema S-371 6696 47 Ms. Anju Singh S-372 6397 Mr. Anand Kumar 48 S-375 5888 Chaudhary 49 Mrs. Archana S-376 5624 50 Mr. Dinkar Prakash Tripathi S-379 6157 51 Mr. Ravi Shankar Prasad S-380 5897 42 52 Mr. Abhishek Awasthi S-381 5152 53 Mr. Punit Garg S-382 5393 Case.No. 79/2022 Sh. Vivek Gupta vs. M/s Maheshwari Infratech Pvt Ltd. Page 2 of 7 Sh. Vivek Gupta vs. M/s Maheshwari Infratech Pvt Ltd. Annexure - A 54 Mrs. Neha Pal S-383 5490 55 Mr. Dinkar Prakash Tripathi S-386 6157 56 Mrs. Pranita S-387 ....
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.... 4 of 7 Sh. Vivek Gupta vs. M/s Maheshwari Infratech Pvt Ltd. Annexure - A 108 #N/A G-032 4953 109 #N/A G-033 10474 110 #N/A G-040 13460 111 #N/A G-046 7328 112 #N/A G-048 3262 113 #N/A G-049 6757 114 #N/A G-055 6789 115 #N/A G-056 42093 116 #N/A G-074 12003 117 #N/A G-077 55152 G-087B formerly 118 #N/A 22930 G-094 119 #N/A G-088 30042 120 #N/A G-089 29754 121 #N/A G-094 20008 122 #N/A G-095 51358 123 #N/A G-097 8072 124 #N/A G-100 33244 125 #N/A G-101 25070 126 #N/A G-102 47826 127 #N/A G-103 25441 128 #N/A G-104 8090 129 #N/A G-105 25616 130 #N/A G-119 28698 131 #N/A LG-017 20010 132 #N/A LG-086 14918 133 #N/A LG-016 18872 134 #N/A S-222 17513 Case.No. 79/2022 Sh. Vivek Gupta vs. M/s Maheshwari Infratech Pvt Ltd. Page 5 of 7 Sh. Vivek Gupta vs. M/s Maheshwari Infratech Pvt Ltd. Annexure - A 135 #N/A S-224 15834 136 #N....