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2022 (7) TMI 698 - NAPA - GSTProfiteering - purchase of flats - it is alleged that the Respondent had not passed on the commensurate benefit of ITC to him by way of commensurate reduction in price against payments due to him - contravention of section 171 of CGST Act - interest - penalty - HELD THAT:- The Authority finds no reason to differ from the above detailed computation of profiteering in the DGAP's Report or the methodology adopted. Hence, the Authority holds 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 1.27% and during the post-GST period (July-2017 to September-2019), it was 6.67%, This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 5.40% (6.67%-1.27%) of his turnover and the same was required to be passed on to the Applicant No. 1 and the other homebuyers/shop buyers/customers. The Authority determines the amount profiteered by the Respondent for the Project Arihant Anchal Phase I, during the period 1.07.2017 to 30.09.2019 as Rs. 1,78,32,984/-. Therefore, the amount of ITC benefit to be passed on by the Respondent to all the homebuyers/shop buyers/customers is Rs. 1,78,32,984/-. This amount is inclusive of Rs. 34,137/- (including GST on the base amount of Rs. 31,104/-) which is the benefit of ITC required to be passed on with respect to Flat no. 4-301 in Tower Benicia which has been agitated by the Applicant No. 1 - the amount of Rs. 1,78,32,984/- (including 12% GST) that has been profiteered by the Respondent from his homebuyers/shop buyers/customers, including Applicant No. 1, shall be refunded by him, along with interest @18% thereon, from the date when the above amount was profiteered by him till 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.1,78,32,984/-. Hence the Respondent is directed to also pass on interest @18% to the homebuyers/shop buyers/customers, including Applicant No. 1 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 provisions of Rule 133 (3) (b) of the CGST Rules 2017. Penalty - HELD THAT:- The Respondent has denied the benefit of tax reduction to his buyers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for imposition of penalty under the provisions of the above Section. However. since the provisions of Section 171 (3A) have come into force w.e.f 01.01.2020 whereas the period during which violation has occurred is w.e.f. 01.07.2017 to 34.09.2019, hence the penalty prescribed under the above Section cannot be imposed on Respondent retrospectively for the impugned period.
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