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2022 (8) TMI 364 - NAPA - GSTProfiteering - purchase of a Flat - allegation is that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price - contravention of section 171 of CGST Act - penalty - HELD THAT:- The Authority finds no reason to differ from the computation of profiteering in the DGAP's Report or the methodology adopted. The DGAPs Report concludes that the ITC as a percentage of the turnover that was available to the Respondent for the project 'Swati Florence' during the pre-GST period (April-2016 to June-2017) was 2.31% and during the post-GST period (July-2017 to July-2020), it was 8.64%. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 6.33% (8.64% - 2.31%) of his turnover and the same was required to be passed on to the customers/home buyers/recipients. Hence, as tabulated in Table 'C' above, the Authority determines the profiteered amount for the period from July-2017 to July-2020, in the instant case, as Rs.4,52,79,754/- and the same was required to be passed on by the Respondent to their customers/home buyers/recipients. It is also evident from the Report of the DGAP that during the investigation, the Respondent has claimed that he has passed on benefit of ITC amounting to Rs.1,78,71,200/- to the customers/home buyers/recipients. To verify the claim of the Respondent, the DGAP sent e-mails to 177 customers/home buyers/recipients asking them to confirm whether they have received the benefit of ITC as claimed by the Respondent. Out of 177 customers/home buyers/recipients. only 36 customers/home buyers/recipients replied. Out of these 36 customers/home buyers/recipients, only 32 customers/home buyers/recipients confirmed the receipt of benefit of ITC from the Respondent. Hence, the verification of passing on the benefit of additional ITC done by the DGAP is not conclusive and it cannot be confirmed that the Respondent has passed on an amount of Rs.1,78,71,200/- to his customers/home buyers/recipients. Therefore. the profiteered amount required to be passed on to the customers/home buyers/recipients by the Respondent is determined to be Rs.4,52,79,754/-. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to his customers/home buyers/recipients in contravention of the provisions of Section 171 (I) Of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. That Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was July-2017 to July-2020, therefore, he is liable for imposition of penalty under the provisions of the above Section tor the amount profiteered from 01.01.2020 onwards, Accordingly, notice be issued to him. This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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