2026 (1) TMI 1055

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....document/annexures and found that the respondent has opted for new scheme after 31.03.2019 for discharging @ 5% in accordance with the notification 3/2019-Central Tax (rates) dated 29.03.2019. The profiteering has been calculated up to the period of 29.03.2019. 5. The DGAP adopted the methodology such as:- "The profiteering if any needs to be determined by calculating any input tax credit under GST which has become eligible to be taken as credit has been availed and utilised by the supplier of service to discharge its GST liability on provision of output service. Thus, any ITC will result in saving to the supplier of service only if the same has resulted in savings to the supplier in the form of decreased cost on account of avai....

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....ue was worked out. ITC as a percentage of purchase value was used by respondent during the pre-GST period was 7% and for post-GST period it was 13.25%. The ratio of ITC to total purchase of goods and services has increased by 6.25% in post-GST period as compared to pre-GST period. 8. Further, GST @ 12% was also applied by on the profiteered amount by the DGAP. 9. After investigation it was concluded that respondent has profiteered an amount of Rs. 1,54,02,290 plus GST @ 12% i.e. 18,48,275 totalling Rs. 1,72,50,565. 10. The respondent filed its written submission and denied all the allegations made in the report. It is submitted that the methodology adopted by DGAP for investigation is contrary to the directions given by Hon'ble Hig....

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....ply as well as during the course of personal hearing. 16. After our thoughtful consideration, we observe that keeping in view the spirit of principal laid down by Hon'ble High Court of Delhi in the case of Reckitt Benckiser India Pvt. Ltd. Vs. Union of (Supra), submissions made by the respondent regarding comparison of the GST availed on the actual Goods and Services purchased in the Post GST period with the ITC available on such goods and services by applying the applicable rates on such goods and services in the pre- GST period carries weight. The contentions contained in the written submission as well made by learned counsel during the course of personal hearing have merits. 17. Since, the respondent have claimed that they have sub....