TMI Blog2019 (5) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit 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. - Case No. 32/2019 - - - Dated:- 23-5-2019 - SH. B. N. SHARMA, CHAIRMAN, SH. J. C. CHAUHAN, TECHNICAL MEMBER, MS. R. BHAGYADEVI, T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er investigation. Similarly vide the minutes of its meeting held on 13.12.2018 had forwarded the fourth application also to the DGAP for investigation as to 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? 5. The DGAP on receipt of the first application vide notice dated 07.09.2018 had called upon the Respondent under Rule 129 of the CGST Rules, 2017 to reply as to whether the benefit of ITC had been passed on by him to the recipients by way of commensurate reduction in prices and also asked him to suo-moto determine the quantum of benefit which was not passed on. The DGAP on receipt of the second, third and fourth application from the Standing Committee on Anti-profiteering had included these Applicants as interested parties in the ongoing proceedings and they were intimated accordingly. The DGAP had carried out investigation in this case from 01.07.2017 to 31.08.2018. 6. The Respondent had submitted replies vide letters/emails dated 28.09.2018, 09.10.2018, 22.10.2018, 31 .10.2018, 19.1 1.2018, 22.01.2019 and 13.02.2019 stating that the above project consisted of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before Execution of Agreement 7.6.2017 4, 29, 342 4,23,800 - 25,428 43,015 - 9, 21, 585 8.02% 1b On or before Execution of Agreement 7.6.2017 4,29,342 4,23,800 - 25,428 43,015 - 9, 21, 585 8.02% 2 On Commencement of Foundation 1.1.2018 4,29,342 4,23,800 - - - 1,02,377 9,55,519 12% 3 On Commencement of Basement / Stilt 1.1.2018 4,29,342 4,23,800 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 On Completion of Painting Not yet dues as on 31.08.2018 2,79,072 2,75,470 - - - 66,545 6,21,087 12% 12 On or before Registration/Possesion 2,14,672 2,11,900 4,98,180 - - 1,40,861 10,65,613 12% 18% Total 42,93,420 42,38,000 4,98,180 50,856 86,030 9,08,688 1,00,75,174 8. The DGAP has also stated that para 5 of Schedule-III of the CGST Act, 2017 (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) reads as Sale of land and, subject to clause (b) of paragraph 5 of Schedule II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of GST paid on all the inputs and input services including the GST paid by the sub-contractors. The DGAP has also claimed that based on the information and documents submitted by the Respondent for the period July, 2017 to August, 2018, the details of ITC availed by him and his turnover from the above project during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to August, 2018) periods, were reconciled with his ST-3, VAT and GSTR-3B returns and credit registers. Accordingly, the ratio of ITC benefit to the taxable turnover has been furnished in the Table B given below:- Table- B (Amount in Rs.) S. No. Particulars April, 2016 to March, 2017 April, 2017 to June, 2017 Total (Pre-GST) July, 2017 to March, 2018 April, 2018 to August, 2018 Total (Post-GST) 1 CENVAT of Service Tax Paid on Input Services (A) 2,74,30,983 1,99,27,458 4,73,58,441 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GAP has also claimed that the Central Government, on the recommendation of the GST Council, had levied 18% GST (effective rate 12% in view of 1/3rd abatement on value of land) on construction service vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (Annex-24). The Report has stated that the allegation of profiteering was not established against the Respondent from the rate of tax angle, by comparing the applicable tax rates in the pre-GST and post-GST periods. In the pre-GST period (April, 2016 to June, 2017), Service Tax @ 6% and VAT@ 10.15% were payable on the construction service (effective tax rate on total Basic sale price was 8.02% as shown in table-A Supra) and in the post-GST period (July, 2017 to August, 2018), the effective GST rate was 12% on construction service. Therefore, he has concluded that the applicable tax rate on construction service had increased from 8.02% in the pre-GST period to 12% in the post-GST period. The DGAP has further contended that there was an increase in the rate of tax and there was no additional benefit of ITC with the implementation of GST w.e.f. 01.07.2017, hence the provisions of Section 171 of the CGST Act, 2017 were not a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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