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2022 (6) TMI 1252 - NAPA - GSTProfiteering - construction service supplied by the Respondent - it is alleged 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 the flat purchased from the Respondent - contravention of section 171 of CGST Act - Interest - Penalty - time limitation - 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 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 3.56% and during the post-GST period {July-2017 to March-2019), it was 11.74% for the project “Sierra-Vizag”. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 8.18% [11.74% (-) 3.56%] of his turnover for the said project and the same was required to be passed on to the customers/flat buyers/recipients. The DGAP has calculated the amount of ITC benefit to be passed on to all the flat buyers as Rs. 6.46,06,227/- for the project “Sierra-Vizag”, the details of which are mentioned in Table-D. The Authority finds that the Respondent has profiteered by an amount of Rs. 6,46,06,227/- for the Project “Sierra-Virag” during the period of investigation i.e. 01.07.2017 to 31.03.2019, The above amount that has been profiteered by the Respondent from his home buyers in the above said Project shall be refunded by him, along with interest @18% thereon, from the date when the above amount was profiteered by him did the date of such payment, in accordance with the provisions of Rule 133 (3) (b) of the CGST Rules, 2017. Interest - HELD THAT:- The Respondent is also liable to pay interest as applicable on the entire amount profiteered. i.e. Rs. 6,46.06,227/- for the project “Sierra-Vizag”. Hence the Respondent is directed to also pass on interest @18% to the customers/ flat buyers/recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ payment, as per the provisions of Rule 133 (3) (b) of the CGST Rules, 2017. Penalty - HELD THAT:- Vide Section 112 of the Finance Act, 2019 specific penalty provisions have been enacted for violation of the provisions of Section 171 (1). Such provisions have come in to force w.e.f. 01.01.2020, by inserting Section 171 (3A). Since, no penalty provisions were in existence between the period from 01.07.2017 to 31.03.2019 when the Respondent had violated the provisions of Section 171 (1). the Authority holds that the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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