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2020 (6) TMI 674 - NATIONAL ANTI-PROFITEERING AUTHORITYProfiteering - purchase of Flat - allegation that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the prices - contravention of section 171 of CGST Act - penalty - HELD THAT:- The Respondent has benefited from the additional ITC to the extent of 8.73% of the turnover during the period from July, 2017 to March, 2019 and hence the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has not passed on the above benefit to his customers and thus he has profiteered an amount of ₹ 19,23,01,682/- inclusive of GST @ 12% on the base profiteered amount of ₹ 17,16,97,930/-. Further, the Respondent has realized an additional amount of ₹ 4,06,859/- and ₹ 2,85,572 which includes both the profiteered amount @ 8.73% of the taxable amount (base price) and 12% GST on the said profiteered amount from the Applicant No. 1 and Applicant No. 2 respectively. He has further realized an additional amount of ₹ 19,16,83,441/- which includes both the profiteered amount @ 8.73% of the taxable amount (base price) and 12% GST on the said profiteered amount from the 907 flat buyers other than the Applicant No. 1 and 2. The details of the profiteered amount and the buyers have been mentioned by the DGAP in Annexure-14 of his Report dated 28.10.2019. These buyers are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on the amounts of ₹ 19,16,83,441/-, ₹ 4,06,859/- and ₹ 2,85,572/- to the other flat buyers, the Applicant No. 1 and the Applicant No. 2 respectively along with the interest @ 18% per annum from the dates from which the above amounts were collected by him from them till the payment is made, within a period of 3 months from the date of passing of this order as per the details mentioned in Annexure-14 attached with the Report dated 28.10.2019. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats of the above Project commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 31.03.2019 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. The concerned Commissioner CGST/SGST shall ensure that the above benefit is passed on to the eligible flat buyers. In case the above benefit is not passed on by the Respondent the above Applicants or any other buyer shall be at liberty to approach the Haryana State Screening Committee to initiate fresh proceedings against the Respondent as per the provisions of Section 171 of the CGST Act, 2017. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his above project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
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