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2019 (11) TMI 1085 - NAPA - GSTProfiteering - purchase of a flat in the Respondent's project “Synera”, situated at Sector-81, Gurugram, Haryana - benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in price not passed on - contravention of Section 171 of the Central Goods and Services Tax Act, 2017 - penalty - HELD THAT:- It is clear that the ITC as a percentage of the turnover that was available to the respondent during the pre-GST period from April, 2016 to June, 2017 was 4% and during post-GST period from July, 2017 to December, 2018, it was 6.61% and hence it is established that the respondent had benefitted from the benefit of additional ITC to the extent of 2.61% (6.61% - 4%) of the turnover. It is also clear from the record that the Central Government, on the recommendation of the GST council, had levied 18% GST with effective rate of 12% in view of 1/3rd abatement on value on the construction service, vide N/N. 11/2017-Central Tax (rate) dated 28.06.2017 which was reduced in the case of affordable housing from 12% to 8%, vide N/N. 1/2018-Central Tax (rate) dated 25.01.2018. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats and the shops being constructed by him in his Project ‘Synera’ in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has 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 - a Show Cause Notice be issued to him directing him to explain as to why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
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