The Tax Publishers 2022 TaxPub(GST) 1482 (NAA) : (2023) 110 ITPJ (G) 0118

CENTRAL GOODS AND SERVICES TAX ACT, 2017

Section 171

Where ITC as a percentage of turnover during pre-GST period and post-GST period were 0.07% and 2.51%, respectively and where benefit of additional ITC was not passed on to recipients of supply, such benefit was required to be passed on by way of commensurate reduction in prices to home buyers.

Anti-Profiteering - Benefit of additional input tax credit not passed on to recipients of supply - Validity -

The Applicant No. 1 alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction in price against payments due to him. Held: Input tax credit as a percentage of the turnover during the pre-GST period and the post-GST period, were 0.07% and 2.51%, respectively were available to the Respondent which confirmed that the Respondent had benefited from additional input tax credit to the tune of 2.44% of the turnover. The Authority determined that the Respondent realized an additional amount of Rs. 1,56,77,149 which included both the profiteered amount @2.44% of the taxable amount and GST @12% on the said profiteered amount from the 71 home buyers/shop buyers including Applicant No. 1 during the period from 1-7-2017 to 30-9-2019 which was required to be passed on the eligible home buyers of his impugned project.

REFERRED :

FAVOUR : In favour of applicant

A.Y. :



IN THE NATIONAL ANTI-PROFITEERING AUTHORITY

AMAND SHAH, TM & PRAMOD KUMAR SINGH, T.M. HITESH SHAH, T.M.

Dhiraj Shetty v. Bhagwati Infra

Case No. 68/2022

2 September, 2022

Applicant No. 1 in person by : Sh. Dhiraj Shetty

Bharat Raichandani, Rishab Jain Deepak Khokhar, Annweshaa Laskar, Advocates, on behalf of the Respondent.

Lal Bahadur, Assistant Commissioner for DGAP.

ORDER

The instant Report dated 04-11-2020, has been furnished by the Applicant No. 2 i.e. Director General of Anti-Profiteering (DGAP) under rule 129(6) of the Central Goods and Services Tax Rules, 2017. The brief facts of the present case, are that a reference was received by the DGAP from the Standing Committee on Anti-profiteering on 09-10-2019 to conduct a detailed investigation in respect of an application filed under rule 128 of the Central Goods and Services Tax Rules, 2017 alleging profiteering by the Respondent in respect of purchase of a flat in the Respondents project Bhagwati Eminence, situated at Plot 7/7A, Sector-13, Nerul, Navi Mumbai. The Applicant No. 1 alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction in price against payments due to him. The Applicant No. 1 also stated that on raising concern to the Respondent, he was informed that already a discount of 3% had been given to him on the 12% GST and remaining 4% of the ITC will be used by the promoters without passing it on to the customers on the reasoning that GST ITC refunds process was unclear, complex and uncertain. Further, on being asked about who keeps the remaining part of ITC after the 3% discount given to the customer from the 12% GST, the Applicant No. 1 received the following reply vide email dated 6-7-2019 which reads as Before 31-3-2019 builder has already paid 12% on the due amount so obviously the amount goes to the government tax. The Applicant No. 1 submitted the following documents along with his application:

(a) E-mails of correspondence with Respondent requesting to pass on the benefit of input tax credit.

(b) Copy of Demand Letters and receipts.

2. On receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 09-10-2019, a Notice under rule 129 of the CGST Rules 2017, was issued on 15-10-2019 by the DGAP, calling upon the Respondent to reply as to whether he admitted that the benefit of input tax credit had not been passed on to the recipients by way of commensurate reduction in price and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the Notice as well as to furnish all documents in support of his reply.

3. The Respondent as well as the Applicant No. 1 were afforded an opportunity by the DGAP to inspect the non-confidential evidences/information during the period 24-10-2019 to 25-10-2019 and on 7-10-2020 to 12-10-2020 respectively however, neither Respondent nor Applicant No. 1 had availed of the said opportunity.

4. The Applicant No. 1 vide e-mail dated 28-9-2020 had requested to send the non-confidential documents by e-mail therefore, the DGAP vide e-mails dated 20-10-2020 and 22-10-2020 had provided the non-confidential documents/reply furnished by the Respondent which the Applicant No. 1 vide e-mails dated 21-10-2020 & 22-10-2020 acknowledged to have received and submitted that :--

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