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2022 (10) TMI 461 - NAPA - GSTProfiteering - purchase of Flat - it is alleged that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price - contravention of section 171 of CGST Act - interest - penalty u/s 171 (3A) of the CGST Act, 2017 - HELD THAT:- The Authority finds that it is clear from a 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. Whether there was any net benefit of ITC with the introduction of GST? - HELD THAT:- 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 3.02% and during the post-GST period (July-2017 to December-2018), it was 6.66% for the project “Godrej 24”. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 3.64% [6.66% (-) 3.02%] 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 the customers/flat buyers/recipients as Rs. 6,89,62,698/- for the project “Godrej 24”, the details of which are mentioned in Table- B above. Further as per Table-C of DGAP, the profiteering amount to be passed on to the Applicant No. 1 is nil as no post-GST billing during the investigation period was made to Applicant No. 1. The Authority finds no reason to differ from the above detailed computation of profiteered amount by the DGAP or the methodology adopted by it. The Authority determines that the Respondent has profiteered an amount of Rs. 6,89,62,698/-(Rupees Six Crore Eighty-nine Lacs Sixty-two Thousand Six Hundred Ninety-eight only) during the period under present investigation i.e. 1.07.2017 to 31.12.2018, in the present Project - the Authority under Rule 133 (3)(a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the customers/flat buyers/recipients in the Project “Godrej 24” commensurate with the benefit of additional ITC received by him. Interest - HELD THAT:- The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 6,89,62,698/- for the project “Godrej 24”. 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:- The Respondent has committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 31.12.2018, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 31.12.2018 when the Respondent has committed the above violation and hence the penalty under Section 171 (3A) can not be imposed on the Respondent for such period. Accordingly, notice for imposition of penalty is not required to be issued to the Respondent. Application disposed off.
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