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2019 (6) TMI 763 - NAPA - GSTProfiteering - booking of Flat No. 0702, Block-F, in the Respondent’s project “Laurel Heights” - benefit of Input Tax Credit not passed on by way of commensurate reduction in the price - contravention of section 171 of CGST Act - HELD THAT:- The Respondent has himself admitted that there has been benefit of ITC derived and the benefit has been passed on by him to all his customers with whom agreements were entered on or before 30.06.2017. According to him the benefit has been computed at ₹ 9/per sq. ft. and based on this calculation he has passed on benefit of ₹ 22,83,426/- to 221 flat buyers. To arrive at this derived benefit the Respondent has provided worksheet (annexure-I to his reply) showing that the pending work orders with his sub-contractors were renegotiated and were reduced by ₹ 49,85,249/- which works out to ₹ 9/- per sq. ft. However no documents have been submitted to establish the credentials of the worksheet filed by him. The DGAP has correctly analysed the ITC ratio as 2.66% and applying this ratio to the payments made on or after 01.07.2017 the profiteered amount is determined as ₹ 99,20,246/-. This amount includes profiteered amount of ₹ 18,563/- to be paid to the Applicant No. 1 and ₹ 80,37,392/- to all the other 231 buyers. The Respondent has also to pass on the benefit of profiteered amount of ₹ 18,64,290/to the land owner who will in turn pass on the benefit to his buyers. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his Project ‘Laurel Heights’ in contravention of the provisions of Section 171 (1)(i) of the CGST Act, 2017 and has thus realized more price from them than what he was entitled to collect and has also compelled them to pay more GST on the additional realisation than what they were required to pay by issuing incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty under the provisions of the above Section - a Show Cause Notice be issued to him directing him to explain as to why the penalty prescribed under Section 122 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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