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2019 (6) TMI 1170 - NAPA - GSTProfiteering - City Park Township - benefit of Input Tax Credit (ITC) not passed on - contravention of the provisions of Section 171 of the CGST Act, 2017 - penalty - 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 hence this issue is not relevant in this case. Benefit of ITC in the post-GST era - HELD THAT:- It has been revealed by the DGAP's report that the benefit of additional ITC of 9.68% of the taxable turnover during the period w.e.f. 01-07-2017 to 30-06-2018 the amount of ITC as on 30-06-2018, has accrued to the respondent and the same is required to be passed on the above applicant and the other flat buyers. The DGAP has calculated the amount of ITC as ₹ 74,36,865/- which was availed by the respondent vide Table-D on the basis of the information supplied by the respondent and hence the calculation done by him can be relied upon. The amount of profiteering in terms of Rule 133(1) of the CGST Rules, 2017 is determined as ₹ 81,67,546/- including GST @ 12% on the base profiteered amount - it is ordered that the respondent shall reduce price to be realized from the buyers of the flats commensurate with the benefit of ITC availed by him. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the Applicants as well as the rest 36 purchasers of flats in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus realized more price from them than what he was entitled to charge and has also compelled them to pay more GST than what they were required to pay by issuing incorrect tax invoices and hence he has committed offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty under the above Section read with Rule 133 (3) (d) of the CGST Rules, 2017 - keeping in view the principles of natural justice it would be appropriate to issue fresh notice asking him to explain why penalty should not be imposed on him for the above offence. Application disposed off.
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