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2019 (5) TMI 1366 - NAPA - GSTProfiteering - supply of construction service related to purchase of Apartment - benefit of Input Tax Credit (ITC) not passed on - contravention of provisions of section 171 of CGST Act, 2017 or not - whether the Respondent had passed on the benefit of ITC by way of commensurate reduction in price, on implementation of GST w.e.f. 01.07.2017 or not? - Quantum of profiteering. 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 as the same was 8.02% in the pre GST period and 12% 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 by the DGAP’s Report that the ITC as a ratio of Respondent’s taxable turnover had decreased from 7.56% to 7.09% as is evident from Table B above that there was no additional benefit of ITC which had accrued to the Respondent post-GST as compared to pre-GST period. In view of the fact that there was no reduction in the rate of tax nor there was increased additional benefit on account of ITC, the provisions of Section 171 of CGST Act, 2017 could not be invoked in this case. The Respondent had not availed any additional benefit of ITC post-GST as compared to pre-GST therefore there was no contravention of the provisions of Section 171 (1) of the CGST Act, 2017. Moreover the Applicants No. 1, 2 and 4 through their emails dated 09.04.2019 and 11.04.2019 had categorically stated that they agreed with the Report of the DGAP and they were not entitled to the benefit of ITC as per the provisions of the above Section. Application dismissed - decided against appellant.
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