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2022 (8) TMI 1437 - NATIONAL ANTI-PROFITEERING AUTHORITYProfiteering - purchase of flat in project Laxmi - allegation is that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price of flat - contravention of section 171 of CGST Act - 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 rule of tax and the second pertaining to the passing on the benefit of 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 1.61% and during the post-GST period (July-2017 to October-2020), it was 9.88% for the project "Laxmi Apartment's". This confirm that, post-GST the Respondent has been benefited from additional ITC to the tune of 8.27% [9.88% (-) 1.61%] of his turnover for the said project and the same was required to be passed on to the customer/flat buyers/recipients. The DGAP has calculated the amount of ITC benefit to be passed on to the customers/flat buyers/recipients as Rs. 6,33,70,091/- (which includes an amount of Rs. 57,557/- in relation to Applicant No 1) for the project "Laxmi Apartment". The Authority finds no reason to differ from the above detailed computation of profiteered amount by the DGAP or the methodology adopted by it. The Authority finds that the Respondent has profiteered an amount of Rs. 6,33,70,091/- (Rupees Six Crore Thirty Three Lacs Seventy Thousand Ninety One only) during the period under present investigation. This includes an amount of Rs. 57,577/- in relation to Applicant No 1. Therefore given the above facts, the Authority under Rule 133(3)(a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the customers/flat buyers/recipients commensurate with the benefit of additional ITC received by him. The Respondent has denied the benefit of ITC to the buyers of his flats in contravention of the provisions of section 171(1) of the CGST Act, 2017. We hold that the Respondent has committed an offence by violating the provisions of section 171(1) during the period from 1-7-2017 to 31-10-2020 and therefore, he is liable for imposition of penalty under the provisions of section 171(3A) of the above Act - there exists reason to investigate Respondent's other projects, if any, for the purpose of determination of profiteering Accordingly this Authority as per the provisions of section 171(2) of the CGST Act, 2017 read with rule 133(5) CGST Rules, 2017 directs the DGAP to conduct investigation in respect of Respondent's other projects if any under the same GSTIN: 06AAFCO088311Z8. Accordingly this Order having been passed today fails within the limitation prescribed under rule 133(1) of the CGST Rules, 2017.
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