TaxTMI 
TaxTMI 
2026 (9) TMI 1483
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....17; therefore, there was no question of VAT registration and transmission of credit (TRANS-II). On 01.04.2019, the project status was ongoing. 3. The Respondent had not opted for any optional scheme in March, 2019, which was effective from 01.04.2019. There were a total 84 units in the Respondent's project. Out of 84 flats total number of 65 flats have been booked and 19 flats remained unbooked. The first booking amount was received on 21.02.2019, i.e. after the introduction of GST. 4. Shri Kundan Singh, R/O B-304, Staff quarters, GMERS Hospital, Gotri, Vadodara-390021 (hereinafter referred to as 'the Applicant') booked a flat as unit no. C-403 in Block-C in GST regime. Commencement of proceedings and Investigation 5. The present proceedings arise out of an application filed by the Applicant under Rule 128 of Central Goods and Services Tax Rules, 2017 (for short the "CGST Rules, 2017") alleging profiteering in respect of Construction Services supplied by the Respondent in their project "Shree Two". It was alleged that the Respondent failed to pass on the benefit of the Input Tax Credit (for short the "ITC") to the Complainant by way of commensurate reduction in prices o....
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....ils of these 10 flats are quoted by the DGAP in its report in the following manner:- S.No. Name of the Buyer Email ID of Buyer Flat No. & Tower Carpet Area (in Sq Mt.) Affordable Total payment received from Buyer (Inclusive of GST) (In Rs.) A B C D 1 Mr. PATEL NIRAV SNEHALBHAI [email protected] C-202 84.91 Yes 4117050/- 2 Mr. KAUSHAL H. DESAI /Ms. KHYATI KAUSHAL DESAI kaushalhdesai@ yahoo.com C-302 84.91 Yes 4095000/- 3 Ms. KRUPABEN ARVINDKU MAR PATEL Not Available C-402 84.91 Yes 3485250/- 4 Ms. PRAGNA DHARMES HKUMAR PATEL / Mr. DHARMES HKUMAR NARENDR AKUMAR PATEL [email protected] C-502 84.91 Yes 3685500/- 5 Ms. MANISHA ANILBHAI PATEL / Mr. PATEL ANIL LABHUBHAI dr.anilp30@gma il.com C-602 84.91 Yes 3685500/- 6 Ms. INDIRABE N ASHOKKU MAR PADALIA poojapadalia28 @gmail.com C-702 84.91 Yes 3685500/- 7 Ms. ILABEN MEHTA Not Available D-301 84.91 Yes 3685500/- 8 Mr. PARMAR BHARATK UMAR JAYANTILAL/Mrs. PARMAR ROSHNIBE N BHARATKUMA....
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..... PANICKER / Ms. ESHA SOORAJ PANICKER Not Available D-501 84.91 Yes 4095000/- 195000/- 39000/- 156000/- 10 Mrs. BHAVI NI NITIN DUSANE / Mr. NITIN N. DUSANE Not Available D-601 84.91 Yes 4222969/- 201093/- 40218/- 160875/- Total Savings (profiteering) (In. Rs.) 1476836/- Profiteering (Add GST @12%) (In. Rs.) 1654056/- 11. The DGAP concluded that the Respondent has saved a sum of Rs. 14,76,836/- from aforesaid 10 affordable flat buyers in his project and thus has profiteered an amount of Rs. 16,54,056/- (including 12% GST). The Respondent has contravened the provision under Section 171 of the CGST Act, 2017. 12. The Principal Bench of the GST Appellate Tribunal (GSTAT), constituted under sub-section (3) of section 109 of the CGST Act, 2017 has been empowered to examine Anti-Profiteering cases w.e.f. 01.10.2024, vide Notification No. 18/2024-Central Tax dated 30.09.2024. the DGAP submitted its investigation report dated 24.10.2024 before the GSTAT. Proceedings before the GSTAT:- 13. A notice was issued to the Respondent and the Applicant calling upon their written submissions/objections, ....
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....date). The GST annual return figures are set out hereunder: Year Taxable Value CGST @6% SGST @6% 31.03.2020 75,580,154 4,534,809 4,534,809 31.03.2021 74,950,345 4,497,021 4,497,021 31.03.2022 56,926,519 3,415,591 3,415,591 31.03.2023 19,682,477 1,180,949 1,180,949 31.03.2023 2,850,000 171,000 171,000 Total 22,532,477 1,351,949 1,351,949 23. The Respondent has collected less GST from the customer though the Respondent has paid GST @ 12%. The statement of GST recovered from the customer from 25.02.2019 to till date is as below: Period Part Payment Received till date (in Rs./-) GST @ 12% GST Charged and Recovered from Customer 25.02.2019 150,000 18,000 12,000 1.04.2019 100,000 12,000 5,000 8.05.2019 350,000 42,000 17,500 4.06.2019 200,000 24,000 10,000 26.09.2019 550,000 66,000 27,500 11.12.2019 600,000 72,000 30,000 13.02.2020 585,000 70,200 29,250 08.07.2020 390,000 46,800 19,500 27.10.2020 390,000 46,800 19,500 Total 3,315,000 397,800 170,250 24. The summary....
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....partment or the beneficiary is not being benefitted by the Government's decision in lowering the rate of tax. A reading of Sections 171 & 172 of the G.S.T. Act does not show any exception carved out in the event non-reduction in the price of the tickets, nor is the authority empowered to relax the conditions so enumerated under Section 171 (1). This, in other words, also mean that the provision of Sections 171 (1) has to be strictly adhered to.." (Emphasis added) 28. The Hon'ble High Court of Delhi in Reckitt Benckiser India Pvt. Ltd. Vs. Union of India (2024 SCC Online Del 588), has defined the mandate of legislation behind the enactment of Section 171 of the CGST Act, 2017. It is observed:- 97. Section 171 of the Act, 2017 mandates that the suppliers shall pass on the benefit of reduction of the rate of Goods and Services Tax or Input Tax Credits by way of commensurate reduction in prices to the recipient. Section 171 deals with amounts that the Central and State Governments have foregone from the public exchequer in favour of the consumers. This Court is of the view that the amounts foregone from the public exchequer in favour of the consumers cannot be ....
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.... of the Act, 2017 means that whatever actual saving arises due to the reduction in rates of tax or the benefit of the Input Tax Credit, in rupee and paisa terms, must be reflected as equal or near about reduction in price. In other words, tax foregone by the authorities has to be passed on to the consumer as commensurate reduction in prices. 100. Accordingly, Section 171 of the Act, 2017 has been enacted, in public interest, with the consumer welfare objective of ensuring that suppliers pass on the benefit of Input Tax Credits and reduction of rate of Goods and Services Tax to the consumers. The Section does this by firstly creating a substantive obligation under sub-section (1) requiring manufacturers/suppliers to pass on benefits of Input Tax Credits and/or reduction in rate of tax by way of commensurate reduction in prices to the recipients. The said Section further enables the establishment of an Authority to determine whether Suppliers have passed on the benefits of Input Tax Credits and reduction of the tax rates, and to exercise such other powers and functions as may be prescribed. (Emphasis added) 29. In view of the observations made by the Hon'ble High....