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2022 (9) TMI 1506 - NAPA - GSTProfiteering - purchase of a Flat No. F-3/401 in the Respondent's project "Kritika & Swati Apartment" situated at Chak, Gajaria, Lucknow - Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price - contravention of section 171 of GST Act - HELD THAT:- It is clear from the 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 whether there was any net benefit of ITC with the introduction of GST. It is observed from the DGAP's report that there was no sale of flats in pre-GST regime. However, the Authority finds that Respondent had invited applications for the allotment of flats in his new housing scheme 2016 named as "LDA Swati Apartment". Besides, this scheme, the Respondent was also offering flats in "Kritika Apartment". In the scheme, flats were available for registration from 15-7-2016 to 16-8-2016 which was offered by the Respondent. The Respondent had finally announced the lottery draw on 15-6-2017 for the project "Kritika & Swati Apartment". It was clear that the base price of the flats was already fixed before the introduction of GST at the time of advertisement only and hence the benefit of additional ITC accrued to the Respondent post-GST could not have been factored in base prices determined prior to introduction of GST. The Respondent has not produced any evidence or document to prove that the prospective buyers were aware of the fact that the benefit of the ITC arising out of implementation of GST is already factored in the price or cost of the flat, bookings of which were made during the pre-GST period. The first allotment made by the Respondent in the said project was on 4-7-2017. Though the flats were available for registration from 15-7-2016 to 16-8-2016 - it is observed from the report of the DGAP that the Respondent had received Rs. 898.28 lacs of ITC for the project "Kritika & Swati Apartment" after introduction of GST. The Respondent, on his own. has taken cognizance of Anti-Profiteering provision of section 171 of the CGST Act, 2017 and suo motu calculated the amount to be passed on as benefit of addition of ITC to all homebuyers. Since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects also under GST No. 09AAALL0016F1ZK. The Authority has reason to believe that the Respondent may have resorted to profiteering in the other projects also and hence, directs the DGAP under rule 133(5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of section 171 of the CGST Act, 2017 and submit the complete investigation report for all the Projects under this single GST Registration. The Authority finds that this case needs to be investigated by the DGAP based on the above findings in the paras 9 and 10 supra of this Authority. Thus the Authority directs the DGAP to investigate the matter as per the provisions of rule 133(4) and rule 133(5) of the CGST Rules 2017 for the period 1-7-2017 to 30-9-2020 or till the date of Completion Certificate of the Project. A copy of this order be sent to both the Applicant No. 1, the Respondent, Commissioners CGST/SGST Lucknow, the Principal Secretary (Town and Country Planning) free of cost for necessary action.
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