TaxTMI 
TaxTMI 
2023 (12) TMI 148
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....ce and charged GST @12% on the amount due to him against payments. The Complainant has requested to keep his application confidential. 2. The DGAP after investigation has submitted his Report on 29.10.2021 in which he has stated that: - I. The Complainant submitted that the Respondent had committed to give ITC against the GST paid and refund the excess amount post completion of the project. However, after receipt of possession, he had called and emailed the Respondent but no response was received. The Complainant also submitted that the Respondent had processed refund for a close set of people. Further, the Complainant submitted copies of receipts of payments made by him and the Letter/e-mail correspondence made with the Respondent along with his application in APAF-1 form. II. On receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 19.03.2021, a Notice under Rule 129 of the Rules was issued by DGAP on 18.05.2021, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the recipients by way of commensurate reduction in prices and if so, to suo moto determine the quantum thereof and i....
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....ded over to existing members were sold to independent buyers for consideration. The brief summary of the Units in the project had been tabulated in Table-A' below: Table-'A' Sr.No. Particulars No. of Units Saleable Area (Sq. ft.) Remark 1. Existing Members 96 42,767 No Consideration received. 2. Independent Buyers-Pre OC 85 61,680 GST Charged. 3. Independent Buyers-Post OC 67 44,697 No GST Charged in terms of Para 5(b) of Schedule II read with Para 5 of Schedule III. Proportionate ITC reversed. 4. Unsold Units as on 28.02.2021 (These units have also been sold thereafter) 3 2,685 Total 251 1,51,829 (b) The Respondent has also submitted that the Payment schedule for the units sold in the project was construction linked and not time linked. (c) The Respondent has further submitted that his project "Aaradhya Nine- Ghatkopar Avenue" was an affordable housing project having infrastructure status as provided in the Notification of Government of India, Ministry of Finance, Department of Economic Affairs vide F.No.13/6/2009-INF, dated the 30th March,....
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....nt had submitted the following documents/information vide the aforementioned letters/e-mails: (a) Brief profile of the Respondent. (b) Copies of GSTR-1, GSTR-3B & GSTR-9 Returns for the period July, 2017 to February, 2021. (c) Copy of Electronic Credit Ledger for the period July, 2017 to February, 2021. (d) Copy of Trans-1. (e) Copies of ST-3 and VAT Returns for the period April, 2016 to June, 2017. (f) Tax rates - pre-GST and post-GST. (g) Copy of Audited Balance Sheets for FY 2016-17 to FY 2019-20. (h) Declaration in Annexure-IV to the Notification No. 3/2019-CT (Rate) dated 29.03.20219. (i) Copies of all the demand letters and sales agreement executed with one of the buyers in the project. (j) Copy of Land Development Deed dated 30.03.2016 between the Respondent and the existing societies along with unit wise details of 96 existing members. (k) Status of the project "Aaradhya Nine- Ghatkopar Avenue" as on 28.02.2021 in terms of sold and unsold units. (I) Invoice-wise CENVAT/Input Tax Credit register for the period April, 2016 to February, 2021 reconciling with ST-3 and GST....
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....f the CGST Act, 2017. ix. The Respondent vide e-mail dated 04.08.2021 had submitted payment plan (part of the Agreement for Sale), demand & tax invoices for the sale of flat no. A-901 in Wing-A to Sh. Ketan Mukundrai Mehta, measuring 979 square feet (carpet area). The Payment Schedule for the said unit is furnished in Table-'B' below. Table - B (Amount in Rs.) S.No Payment Stage Ratio to total 1. On Booking 10% 2. On Registration of Agreement for Sale 10% 3. On Completion of Excavation 10% 4. On Completion of Basement 10% 5. On Completion of Plinth 5% 6. On Completion of 1st Floor Slab 4% 7. On Completion of 4^th Floor Slab 4% 8. On Completion of 7^th Floor 4% 9. On Completion of 10^th Floor Slab 4% 10. On Completion of 13^th Floor Slab 4% 11. On Completion of Terrace Slab 5% 12. On Completion of Walls and Plaster/Gypsum 4% 13. On Completion of Flooring. Doors, Windows and Sanitary Fittings and Staircases, Lift wells, Lobbies 6% 14. On Completion of Terraces with Water Proofing of the Building 4% 15. On Completion of External ....
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....d the Full Occupation Certificate & Building Completion Certificate on 03.12.2019, and therefore, units sold post 03.12.2019 would be considered as 'Non-GST Supply' in terms of Para 5 (b) of Schedule II read with Para 5 of Schedule III on which GST was not leviable. XI. As regards the allegation of profiteering, it was observed that prior to 01.07.2017, i.e., before the GST was introduced, the Respondent was eligible to avail CENVAT Credit of Service Tax paid on Input Services but no credit was available in respect of Central Excise Duty and VAT paid on the inputs. However, post-GST, the Respondent could avail ITC of GST paid on all the Inputs and the Input Services including the sub-contracts. For the period April, 2016 to 03.12.2019, on the basis of the details of the ITC availed by the Respondent, his turnover from the impugned project "Aaradhya Nine- Ghatkopar Avenue" the ratio of ITC to Turnover, during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to 03.12.2019) periods, was furnished in Table- 'C' below: - Table - 'C' (Amount in Rs.) S.No. Particulars April, 2016 to June, 2017 (Pre-GST) July, 2017 to 03.12.2019 ....
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....9; (Amount in Rs.) S.No. Particulars Post-GST 1. Period A 01.07.2017 to 03.12.2019 (upto OC) 2. Output GST Rate (%) B 12.00% 3. Ratio of CENVAT credit/ ITC to Total Turnover as per table - 'C' above (%) C 4.26% 4. Increase in ITC availed post-GST (%) D=4.26% less 4.19% 0.07% 5. Analysis of Increase in input tax credit: 01.07.2017 to 03.12.2019 (12% GST) 25.01.2018 to 03.12.2018 (8% GST) Total 6. Total Base Price raised/collected during July, 2017 to 03.12.2019 (Rs.) E 1,00,96,28,161 36,36,91,530 1,37,33,19,691 7. Less: Base Price raised during July, 2017 to 03.12.2019 (Flats sold after 01.07.2017 and Price negotiated after ITC adjustments) F 36,46,70,100 18,10,07,630 54,56,77,730 8. Net Base Price raised/collected during July, 2017 to 03.12.2019 (Rs.) G=E-F 64,49,58,061 18,26,83,900 82,76,41,961 9. GST @ 12% or 8% over Base Price H=G*12% or 8% 7,73,94,967 1,46,14,712 9,20,09,679 10. Total amount collected/raised by Noticee l=G+H 72,23,53,028 19,72,98,612 91,96,51,640 11. Recalibrated Ba....
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....- (52+33)] had been sold after receipt of OC which were categorised as 'Non-GST Supply' on which no GST was charged in terms of Para 5(b) of Schedule II read with Para 5 of Schedule III of the CGST Act, 2017. XVII. The DGAP had concluded the investigation stating that the Respondent had passed on the benefit of Rs. 94,83,7351- by issuing cheques to 48 home buyers against the demand raised during the period from 01.07.2017 to 03.12.2019. The Respondent had submitted copies of the Bank Statements along with copies of signed customer confirmation letters for receipt of cheques from all the home buyers vide his submissions dated 31.08.2021 vide which he had passed on the benefit of ITC and the same were duly verified by DGAP with the list of home buyers and found to be correct. The Respondent also submitted sample copies of signed confirmations given by customers acknowledging that the agreed prices between the Respondent and them were after giving effect to such benefit in accordance with/adherence inter alia to the provisions of Section 171 of the Central Goods & Service Tax Act, 2017. Further, to substantiate the Respondent's claim of passing on the benefit of ITC, e-....
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.... C D E F G=E-F H 1. Home Buyers including Applicant 4 2,370 35,114 - 35,114 Benefit to be passed on. List Attached as Annex-21. 2. 48 36,243 6,08,642 94,83,735 (88,75,093) Excess Benefit passed on. List Attached as Annex-22. 3. Other Buyers 33 23,067 - - - Unit Sold Post-GST and Price negotiated after ITC adjustments. No benefit to be passed on. 4. 67 44,697 - - - Unit Sold after receipt of Occupancy Certificate. No benefit to be passed on as No GST charged. 5. 3 2,685 - - - Unsold Units as on 28.02.2021 6. Existing Members 96 42,767 - - - No Consideration was received. Total 251 1,51,829 6,43,756 94,83,735 Benefit to be passed on. List Attached as Annex-21. XX. From the above Table 'E', it was observed that the Respondent was required to pass on the benefit of ITC in the case of 4 home buyers (Sr. 1 of the above Table) by an amount of Rs. 35,114/-. Further, the benefit passed on by the Respondent was higher than what he should have passed on in respect of 48 home buyers including the Complain....
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....f ITC amounting to Rs. 35,114/- to the following customers ('remaining recipients'). Customer Name Unit No Benefit to be passed on (INR) JITENDRA RATILAL SHAH 8-904 10,330 SANKET DANGI 8-601 10,330 PARESH MOHANBHAI DAMA D-1104 5,007 JYOTI YOGESH RAVAL B-802 9,447 In this regard, it was submitted by the Respondent that, without prejudice to the various options available under law and being a law abiding Company, he has paid the said amounts to the above mentioned 4 customers as mentioned in the DGAP's Report. Further, the Respondent also enclosed a copy of his Bank Statement reflecting the above payments and acknowledged copies of NEFT to the above customers. Further, the Respondent had requested to drop the present proceeding as he had passed on the benefit of ITC to all eligible homebuyers. 5. Clarifications were sought from the DGAP on the above submissions of the Respondent under Rule 133 (2A) of the CGST Rules, 2017. The DGAP filed his clarifications dated 10.05.2022 vide which the DGAP had replied that all 4 NEFT transactions had been confirmed by Bank vide email dated 02.05.2022. 6. The Respondent was directed ....
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....ning 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 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. This Commission finds 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 4.19%, whereas, during the post-GST period (July-2017 to December, 2019), it was 4.26%. This confirms that in the post-GST period, the Respondent has been benefited from additional ITC to the tune of 0.07% (4.26% - 4.19%) of his turnover and the same is required to be passed on by him to the recipients of supply, including the Complainant. The Respondent had sold 85 units before receipt of Occupancy Certificate out of which 32 units were in affordable category on which he had charged 8% GST (after 1/3 abatement towards land) remaining 53 units were other than affordable category on which GST was charged @12% (after 1/3rd abatement towards land). Out of the 85 units, 33 units were sold Post-GST and price....