2025 (10) TMI 1170

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....rst report dated 31.12.2020 under Rule 129(6) of the CGST Rules, 2017. 3. Subsequently, upon consideration of the principles of law enunciated by the Hon'ble High Court of Delhi in Writ Petition No. 7743/2019 and connected matters (Reckitt Benckiser India Pvt. Ltd. v. Union of India & Ors.), decided on 29.01.2024, wherein the methodology adopted by the NAA and DGAP for real estate cases was extensively reviewed, the Commission directed DGAP to carry out a re-investigation of the present matter. The relevant part of the Hon'ble Delhi High Court's judgment dated 29.01.2024 in W.P. (C) No. 7743/2019 and connected matters, which have a direct bearing on the method of computation of profiteering in real estate matters is reproduced here: (i) Para 124. NO FIXED/UNIFORM METHOD OR MATHEMATICAL FORMULA CAN BE LAID DOWN FOR DETERMINING PROFITEERING This Court is of the view that no fixed/uniform method or mathematical formula can be laid down for determining profiteering as the facts of each case and each industry may be different. The determination of the profiteered amount has to be computed by taking into account the relevant and peculiar facts of each case. There ....

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....d after taking into account the Input Tax Credit which has become available to the builder in the post Goods and Services Tax period and which was not available to him in the pre Goods and Services Tax. Further, the Hon'ble Delhi High Court, vide Para 129 of its Order 29.01.2024 observed that: "However, this Court finds that methodology adopted by NAA and DGAP to arrive at profiteering amount of the real estate industry was generally based on the difference between the ratio of Input Tax Credit to Turnover under the pre-GST and post-GST period. This Court is in agreement with the contention of the learned counsel of the Petitioners representing the real estate companies that the methodology adopted by NAA is flawed as in the real estate sector there is no direct correlation between the turnover and the ITC availed for a particular period The expenses in a real estate project are not uniform throughout the life cycle of the project and the eligibility of credit depends on the nature of the construction activity undertaken during the particular period. As it is an admitted position that neither the advances received nor the construction activity is uniform throughout ....

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....period under investigation thus extends from 01.07.2017 to 29.06.2022, covering GST-related transactions undertaken by the Noticee prior to the OC. The DGAP also noted that before GST implementation, the Noticee was eligible only for CENVAT credit on services. The Noticee was also enrolled under the Haryana VAT Amnesty Scheme @1.05%, under which VAT input credits were not admissible. 6.5 From the information submitted by the Noticee for the period April, 2012 to June, 2022, the details of the input tax credit availed by them and their purchase value of goods and services forthe project "Gurgaon Hills", the ratio of input tax credit to the purchase value of Goods and Services, during the pre-GST (April, 2012 to June, 2017) and post-GST (July, 2017 to 29 June, 2022) periods are calculated and furnished in table-'A' below: Table-'A' (Amount in Rs) Sl.No. Particulars Pre-GST Period Post-GST Period (April 2012 to June 2017) (July 2017 to 29 June 2022) 1 Credit of Central Excise   Duty and Service Tax availed (A) 14,36,08,290 - 2 Credit of VAT availed (B) - - 3 ITC of GST Availed (C) - 1,70,11,835 4 Total Cred....

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....8, Gurugram, was scrapped. Subsequently, the Co-Noticee entered into a legally registered Sale Agreement dated 17 November 2023, conveying the Project Land and associated development rights to M/s Oberoi Realty Limited, who is to undertake and complete the development of a new project on the said lands. 7.2 Further, the Co-Noticee has produced evidence of due consent from existing buyers, documented via duly signed Consent Letters authorizing the transfer of rights and continued delivery of premises under the new project initiated by Oberoi Realty Limited. The sample Consent Letter clarifies that the Co-Noticee was unable to complete the original development and, following consultations with the buyers, identified Oberoi Realty as a competent developer to take over the project land (registered under Serial No. 15771 at the Sub- Registrar's office). 7.3 As per correspondence dated 10.12.2024, it is confirmed by the Co-Noticee that development of the new project (in lieu of the scrapped "Grand Hyatt Gurgaon Residences") has not yet commenced. 7.4 Pursuant to the Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019, applicable from 01.04.2019, the GST rate for constru....