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2022 (8) TMI 273 - NATIONAL ANTI-PROFITEERING AUTHORITYProfiteering - purchase of Flat - allegation is that the Respondent had not passed on commensurate benefit of Input Tax Credit (ITC) to him - contravention of provisions of Section 171 of the CGST Act, 2017 - interest - penalty - HELD THAT:- It is clear from a plain reading of Section 171 (1) that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue it has been revealed from the DGAP's Report that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 1.17% and during the post-GST period (July-2017 to April-2024 It was 13.52% for the project “Axis Vedam''. This confirms that. post-GST. the Respondent has been benefited from additional ITC to the tune of 12.36% [13.52% (-) 1.17%] of his turnover for the said project and the same was required to be passed on to the customers/flat buyers/recipients, The DGAP has calculated the amount of ITC benefit to be passed on to the customers/flat buyers/recipients as Rs. 40,94,480/- for the project 'Axis Vedam”. the details of which are mentioned in Table- B - the profiteering amount of Rs. 40.94,480/- is with respect to 21 customers/flat buyers/recipients amongst all the customers as on 30.04.2020 in the project 'Axis Vedam”. The list of 21 customers/flat buyers/recipients has been attached as Annexure 'A' with this Order, containing the details of the amount of benefit of ITC to be passed on in respect of the project “Axis Vedam” of the Respondent. Interest - HELD THAT:- The Respondent is liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 40,94,480/- for the project “Axis Vedam”. Hence the Respondent is directed to also pass on interest @18% to the customers/ flat buyers/ recipients on the entire amount profiteered. starting from the date from which the amount was profiteered till the date of passing on/payment, as per the provisions of Rule 133 (3) (b) of the CGST Rules, 2017. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the customers/flat buyers/recipients in his Project “Axis Vedam” in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. That Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01,01.2020. As the period of investigation was 01.07.2017 to 30 04.2020, therefore, he is liable for imposition of penalty under the provisions of the above Section for the amount profiteered from 1.01.2020 onwards. This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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