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2022 (5) TMI 841 - NAPA - GSTProfiteering - construction service - Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the prices - contravention of section 171 of CGST Act - 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 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, The Authority finds 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 1.02%, whereas, during the post-GST period (July-2017 to April, 2020). it was 1.84%. This confirms that in the post-GST period, the Respondent has been benefited from additional ITC to the tune of 0.82% (1.84%-1.02%) of his turnover and the same is required to be passed on by him to the recipients of supply, including the Applicant No. 1. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipients works out to Rs.3,87,94,4931/-. The Authority finds that the Respondent has profiteered by an amount of Rs.3,87,94.493/- during the period of investigation i.e. 01.07.2017 to 30.04.2020 and determined the said amount under Rule 133 (1) of the CGST Rules, 2017, the benefit of which has not been passed on to the recipients - This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017.
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