TaxTMI 
TaxTMI 
2023 (8) TMI 1199
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....ties in respect of the Respondent have never been placed before the DGAP during the course of the investigation for verification of authenticity and hence the same have not been incorporated in the computation of profiteered amount. The Authority further finds that the ITC of VAT, as much as is allowed vide the said VAT Assessment Orders for the period from April 2016 to June 2017 shall be incorporated into the computation of profiteered amount by the DGAP subject to verification of the authenticity of the same. The Authority, therefore, directs the DGAP to ascertain the authenticity of the VAT Assessment Orders submitted by the Respondent for the period from April 2016 to June 2017 and if verified by the State GST Commissioner/Uttar Pradesh VAT Department, the DGAP shall incorporate the amounts, as allowed by the concerned statutory Authority on assessment, in the computation of profiteered amount by including the same as ITC in the pre-GST period and recalculate the profiteered amount and submit his Report to this Authority. ii. The Respondent vide his submissions dated 10.09.2020 and 18.05.2022 has argued that the DGAP has taken an arbitrary figure of ITC of GST Rs. 3,4....
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....he documents/ evidences on record were carefully examined by the DGAP and it was reported as below: - a) That the Respondent was paying GST @ 12% in respect of the instant project as it was a commercial project. b) That the Respondent had submitted the reconciliation of turnover in his statutory ST-3 and GST Returns with the live unit-buyers of the two projects and also the bifurcation of Input Tax Credit as required by the DGAP. c) That the Respondent had also submitted the following documents/information to the DGAP vide his above-mentioned letters/e-mails during the course of the investigation:- i. Copies of GSTR-1 Returns for the period July, 2017 to November, 2019. ii. Copies of GSTR-3B Returns for the period July, 2017 to November, 2019. iii. Copies of Tran-1 Return for transitional credit availed by the Respondent. iv. Copies of VAT & ST-3 Returns for the period April, 2016 to June, 2017. v. Electronic Credit Ledger for the period July, 2017 to November, 2019. vi. CENVAT/ITC Register for the period 01.04.2017 to 30.11.2019. vii. List of buyers in the project "Anandam Square". v....
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....s, reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". Further, Clause (b) of para 5 of Schedule II of the Central Goods and Services Tax Act, 2017 reads as "(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of the completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier". In the light of these provisions, the DGAP has contended that the ITC of the units which were under construction but not sold was provisional ITC that may be required to be reversed by the Respondent, if such units would remain unsold at the time of issue of Completion Certificate (CC), in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017 which read as under:- "17 (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for e....
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....GST) April, 2016 to June, 2017 (Post-GST) July, 2017 to November, 2019 1. Credit of Service Tax Paid on Input Services (A) 8,72,620 - 2. Input Tax Credit of VAT Paid on Inputs (B) 7,89,028 - 3. Total CENVAT/VAT/Input Tax Credit Available * (C)=(A) 8,72,620 - 4. Input Tax Credit of GST Availed (D) - 3,44,11,808 5. Total Turnover from Commercial Area (E) 2,87,081 9,03,06,132 6. Total Saleable Commercial Area in sq. (F) 52,976 52,976 7. Sold Area Relevant to Turnover in sq.ft. (G) 382 31,384 8. ITC proportionate to Sold Area (H) 6,292.30 2,03,86,216 9. Ratio of CENVAT/VAT/Input Tax Credit to Turnover (I) 2.19% 22.57% k) From the above Table-A' the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April 2016 to June 2017) was 2.19% and during the post-GST period (July 2017 to November 2019), it was 22.57% which clearly confirmed that post-GST, the Respondent has been benefited from additional ITC to the tune of 20.38% [22.57% (-) 2.19%] of the turnover. I) The profiteering ....
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....171 of the Central Goods and Services Tax Act, 2017, the benefit of the additional ITC was required to be passed on to the recipients of service. n) Based on the aforesaid CENVAT/ITC availability pre and post-GST and the details of the amount collected by the Respondent from the shop buyers during the period from 01.07.2017 to 30.09.2019, the amount of benefit of ITC not passed on or in other words, the profiteered amount has been quantified by the DGAP as Rs. 2,06,15,692/- which included GST @ 12%, on the base profited amount of Rs. 1,84,06,868/-. The unit-wise break-up of this amount has been given in Annexure-9 of the DGAP's Report. It was also observed that the Respondent had supplied the construction service in the State of Uttar Pradesh only. o) In the instant investigation, he had computed the profiteering covering the period from 01.07.2017 to 30.11.2019 and profiteering, if any, for the period post-November, 2019, had not been examined as the exact quantum of ITC that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed. 3. The NAA after considering the va....
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....il, 2016 to June, 2017 (Post-GST) July, 2017 to November, 2019 1. Credit of Service Tax Paid on Input Services (A) 8,72,620 - 2. Input Tax Credit of VAT Paid on Inputs (B) 7,89,028 - 3. Total CENVAT/VAT/Input Tax Credit Available * (C)=(A)+(B) 16,61,648 - 4. Input Tax Credit of GST Availed (D) - 59,31,808 5. Total Turnover from Commercial Area (E) 2,87,081 9,03,06,132 6. Total Saleable Commercial Area in sq. (F) 52,976 52,976 7. Sold Area Relevant to Turnover in sq.ft. (G) 382 31,384 8. ITC proportionate to Sold Area (H)=G/F*C 11,982 35,14,117 9. Ratio of CENVAT/VAT/Input Tax Credit to Turnover (I)=H/E 4.17% 3.89% iii. Therefore, from the above-revised Table 'A', it was clear that the ITC as a percentage of the turnover that was available to the Respondent for his project "Anandam Square" during the per-GST period (April, 2016 to June, 2017) was 4.14% and for the post-GST period (July, 2017 to November, 2019), it was 3.89%. It clearly confirmed that post-GST, the Respondent had not benefited from additional Input Tax Credit in re....