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2022 (8) TMI 210 - 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) mentioned above 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 2.80%, whereas, during the post-GST period (July-2017 to September, 2019), it was 2.83%. This confirms that in the post-GST period. the Respondent has been benefited from additional ITC to the tune or 0.03% (2.83%-2.80%) 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. 4,44,563/-. The DGAP has calculated the amount of ITC benefit to be passed on to all the eligible recipients as Rs.4,44,563/- on the basis of the information supplied by the Respondent. The Respondent has not disputed the methodology adopted by the DGAP or the amount of profiteering worked out by the DGAP. The names of such homebuyers along with unit number and the benefit already passed on is enclosed with this order as Annexure-A. The Authority concur with the DGAP report dated 31.12.2020. The Authority determines that the Respondent have profiteered by an amount of Rs. 4,44,563/- for the project 'Tower F' in the project “Anmol Fortune-II” during the period of investigation i.e, 01.07.2017 to 30.09.2019. The Authority has also taken note of DGAP verification report dated 10.03.2021 regarding claim of the Respondent that they have passed on Rs. 58,65,423/-. As per the said report, only 23 home buyers out of 117 home buyers have confirmed receipt of the ITC benefit and 2 home buyers have denied receipt of any benefit from the Respondent, the remaining home buyers did not respond to the communication made by the DGAP. This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017.
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