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2020 (12) TMI 888 - NATIONAL ANTI-PROFITEERING AUTHORITYProfiteering - purchase of flat - allegation that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in price - contravention of provisions of Section 171 of the CGST Act, 2017 - Penalty - HELD THAT:- The investigation has correctly established that the Respondent has violated provisions of Section 171 (1) of CGST Act 2017 since the benefit derived by the Respondent on account of additional ITC in the post-GST period from 01.07.2017 to 30.06.2019 was not passed on by him to his homebuyers/ recipients commensurately as required under Section 171 of the CGST Act. The contention of the Respondent is dismissed that the excess (more than commensurate) benefit amounting to ₹ 3,91,714/- passed on by him to 716 homebuyers/ recipients be adjusted against the 'less than commensurate' benefit passed on to the other 20 homebuyers/recipients because the provisions of Section 171 of the CGST Act, 2017 apply to each supply which implies that each homebuyer/ recipient is entitled to the commensurate benefit due to him in respect of the residential unit supplied to him. The adjustment sought by the Respondent, if agreed, would result in depriving the aforementioned 20 homebuyers of the benefit which would be against the legislative intent of Section 171 (1) of the CGST Act, 2017 and is hence not acceptable. Whereas the Respondent was required to pass on the ITC benefit of ₹ 2,71,11,917/- (including GST), in respect of the period July 2017 to June 2019, in terms of provisions of Section 171 of the CGST Act, 2017, he has only passed on ₹ 2,67,88,794/- (including GST) to his homebuyers and that the remaining amount of ITC benefit that remains to be passed on to 20 homebuyers (as detailed in Table D of this Order amounts to ₹ 7,14,837/- Hence we take the view that in compliance with the provisions of Section 171 of the CGST Act, 2017, the Respondent is required to pass on ITC benefit amounting to ₹ 7,14,837/- (inclusive of GST) to the twenty homebuyers - Respondent is thus directed to pass on the above amount to the said homebuyers within a period of three months of this Order. Demand of interest - HELD THAT:- It is also revealed from the submissions of the Respondent that he has not passed on interest @18% on the profiteered amount to his homebuyers, including Applicant No. 1 and the 20 homebuyers who are yet to receive the commensurate benefit. Hence, in line with the provisions of Section 171 (1) of the CGST Act, 2017 read with Rule 133 (3) (b) of the CGST Rules, 2017, we order that the applicable interest shall be paid by the Respondent to his homebuyers from the date of receipt of the additional amount of consideration in the hands of the Respondent till the amount is paid to each buyer, as the Respondent has used this amount in his business. Accordingly, the DGAP is directed to ensure that the interest, at the applicable rate, is paid to the eligible home buyers and submit his report confirming payment of the interest within three months of this Order. Application disposed off.
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