TMI Blog2019 (10) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... 133(3)(b) of CGST Rules, 2017. It is also evident that respondents have denied benefit of ITC to the buyers of the flats being constructed by them in their Lodha Eternis Project in contravention of the provisions of section 171(1) of CGST Act, 2017 and thus resorted to profiteering. Hence they have committed an offence u/s 171(3A) of CGST Act, 2017 and therefore they are apparently liable for imposition of penalty under the provisions of the above section - a SCN be issued to them directing them to explain why the penalty should not be imposed on them. A copy each of this order be supplied to both the Applicants, the Respondents, Commissioners CGST/SGST as well as the Principal Secretary (Town Planning), Government of Maharashtra for necessary action. - Case No. 48/2019 - - - Dated:- 3-10-2019 - Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member, Ms. R. Bhagyadevi, Technical Member, Sh. Amand Shah, Technical Member Present:- None for the Applicant No. 1. Sh. Rana Ashok Rajnish., Assistant Commissioner for the Applicant No. 2. Sh. Mangal Prabhat Lodha, Authorised Representative, Sh. Rakesh Gupta, Sr. Vice President (Taxation), Sh. Timish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 10,37,112 0 2,50,39,694 Balance to be paid Post GST (C)=(A)-(B) 12,88,370 12,71,629 99,684 0 25,59,683 Amount Demanded by Respondents during 01.07.2017 to 31.08.2018 (D) 12,63,107 0 0 1,51,573 14, 14,680 Amount to be demanded by Respondent (E) 25,263 12,71 ,629 0 1,36,828 14,33,720 Total Amount demanded post GST (F)=(D)+(E) 12,88,370 12,71 ,629 0 2,88,401 28,48,400 3. The DGAP has also stated that the Applicant No. 1 had submitted the following documents along with his complaint:- (a) Duly filled in Form APAF-1. (b) Copy of Allotment letter from the Respondents. (c) Copies of Payment Schedule Pre-GST Post-GST. (d) Copy of agreement dated 21.04.2015. Copi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been placed on record by him. II. That the Respondents had also claimed that much before coming in to force of the GST they vide his email dated 17.06.2017 had intimated the above Applicant that the available GST benefits would be passed on to him III. That the Respondents vide their email dated 06.09.2017 had clearly informed the above Applicant that the benefit of ITC would be passed on at the time of possession. IV. That the possession of Flat no. 704 was yet to be handed over to the above Applicant by the Respondents. 6. The DGAP has further intimated that the Respondent No. 2 had also submitted the following documents:- (a) Copies of GSTR-1 returns for July, 2017 to August, 2018 in r/o the Respondent No. 2. (b) Copies of GSTR-3B returns for July, 2017 to August, 2018 in r/o the Respondent No. 2. (c) Copies of Tran-1 statements for the transitional credit availed by the Respondent No. 2. (d) Copies of VAT ST-3 returns for April, 2016 to June, 2017 in r/o the Respondent No. 2. (e) Copy of Electronic Credit Ledger for the period July, 2017 to August, 2018 in r/o the Respondent No. 2. (f) Copies of all demand letters and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular No. 23A of 2018 dated 01.09.2018 wherein it was stated that the developer was not eligible for transitional credit. 8. The DGAP has intimated that the Respondent No. 1 had also submitted the following documents:- (a) Copies of GSTR-1 returns for March, 2018, to August, 2018 in r/o M/s. Lodha Developers Ltd. (b) Copies of GSTR-3B returns for March, 2018, to August, 2018 in r/o M/s. Lodha Developers Ltd. (c) Copy of Electronic Credit Ledger for the period from March, 2018 to August, 2018 in r/o M/S Lodha Developers Ltd. (d) Computation of GST benefit to be passed on. (e) copy of Balance Sheet for FY 2016-17 2017-18 in r/o M/s. Lodha Developers Ltd. (f) Details of taxable turnover and ITC for the project Lodha Eternis. 9. The DGAP after investigation has stated that the main issue for determination was whether there was benefits of reduction in the rate of tax or additional ITC on the supply of construction service provided by the Respondents after coming in to force of the GST w.e.f. 01.07.2017 and whether the Respondents had passed on the above benefits to the recipients in terms of Section 171 of the CGST Act, 2017 or not. The DGAP has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r level 4 28.10.2016 25,26,212 - 1,13,680 - - 26,39,892 10. On initiation of RCC work for level 5 11.11.2016 18,94,660 - 85,260 - - 19,79,920 11. On initiation of RCC work for level 6 24.11.2016 18,94,660 - 85,260 - - 19,79,920 12. On initiation of RCC work for level 7 07.12.2016 18,94,660 - 85,260 - - 19,79,920 13. On initiation of RCC work for level 8 16.12.2016 18,94,660 - 85,260 - - 19,79,920 14. On initiation of facade work external 14.02.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the CGST Act, 2017. Therefore, the DGAP has claimed that the ITC pertaining to the unsold units was outside the scope of this investigation and the Respondents were required to recalibrate the selling price of such units to be sold to prospective buyers by considering net benefit of additional ITC available to them Post-GST. 12. The DGAP has also intimated that another claim made by the Respondents was that the above Applicant had withdrawn his complaint and hence, the investigation should be closed, however, he has submitted that although the proceedings must flow from an application but there was no legal provision under which it could be withdrawn. He has further intimated that as per the provisions of Rule 129 of the CGST Rules, 2017, he was legally bound to complete the investigation in case of any reference having been received from the Standing Committee on Anti-profiteering and hence withdrawal of an application could legally not be a valid reason for closing the investigation. 13. The DGAP has also stated that the Respondents had submitted that the on-going business of Lodha Eternis residential project was demerged into M/s. Lodha Developers Ltd. w.e.f. 20.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,72,55,526 - - - 4. Input Tax Credit of GST Availed as per GST Return (D) - - - 2,92,01,655 3,12,45,551 6,04,47,206 5. Total Taxable Turnover as per Return (E) 1,26,02,62,634 54,81,63,800 1,80,84,26,434 39,67,04,816 25,09,38,848 64,76,43,664 6. Total Saleable Area of Villas in the project (Sqaure ft) (F) 1,98,364.00 1,98,929.00 7. Area Sold relevant to Taxable turnover as per returns (G) 1,19,364.00 1,56,002.00 8 Relevant CENVAT/lnput Tax Credit (H)=[(C)*(G)/(F)] or[(D)*(G)/(F)] 2,83,54,883 4,74,03,270 9. Ratio of CENVAT/ Input Tax Credit to Taxable Turnover [(I)=(H)/(E) 1.57% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to August, 2018 F 64,76,43,664 8 Less: Units cancelled and amount refunded G 9 Net Base Price collected during July, 2017 to August, 2018 H=F-G 64,76,43,664 10 GST Collected @ 12% over Basic Price I=H*12% 7,77,17,240 11 Total Demand collected J=H+I 72,53,60,904 12 Recalibrated Basic Price K=H*(1-E) or 94.25% of H 61,03,95,002 13 GST @ 12% L=K*12% 7,32,47,400 14 Commensurate demand price M=K+L 68,36,42,402 15 Excess Collection of Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicants and the Respondents be asked to appear on 26.12.2018. Since, the Respondents had asked for adjournment of the hearing scheduled on 26.12.2018, it was decided to grant next hearing on 10.01.2019. During the course of the hearing the Applicant No. 1 did not appear, the DGAP was represented by Sh. R. A. Rajneesh, Assistant Commissioner and the Respondents were represented by Sh. Mangal Prabhat Lodha, Authorised Representative, Sh. Rakesh Gupta, Sr. Vice President (Taxation), Sh. Timish Salot, Vice President (Taxation), Sh. Surendra S Gupta, Consultant, Sh. Santosh Thapliyal, Authorised Representative and Sh. Archit Agarwal, Chartered Accountant. 18. The Respondents vide their reply dated 10.01.2019 have submitted that they had agreed to pass on the GST Anti-Profiteering benefit prior to the receipt of the notice of the complaint from the DGAP. They have also submitted that based on the taxes and the duties incurred on the total construction cost on the projects completed in the past it was assumed by them that savings between 4% to 5% would accrue to them hence, they had considered average rate of 4.5% as the GST benefit on the balance construction cost to be incurred, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the utilization of the credit would be higher and distorted. b) That there could be a number of other factors which affected the computation of the ITC benefit like the credit and the taxable value did not synchronize in the same month or same period, increase in the ITC due to increase in the rate of tax chargeable to the services, recovery of maintenance charges and increase in the credit on account of increase in the cost of construction due to increase in the tax rates imposed in the GST period which might lead to the distorted figures of additional ITC. 21. The Respondents have also claimed that the credit and the taxable value did not synchronize in the same month or the same period in the instant case which was evident from the Table-C of the DGAP s Report as follows:- Sr.No. Particulars July 2017 to February 2018 March 2018 to August 2018 Total (Post GST) 1 Input tax credit of GST availed (A) 2,92,01,655 3,12,45,551 6,04,47,206 2 Total Taxable Turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional ITC @3% for services should have been considered by the DGAP. The Respondents have further averred that due to the increase in the rate of tax on services the additional ITC available to him for the period from July-2017 to August-2018 was, as follows, which had not resulted in additional benefit to them as they were already getting it in the pre-GST period:- Sr.No. Particular Amount (Rs.) 1 Taxable Value of Input Services (pure service contracts) A 3,99,33,848 2 ITC availed on these services (18%) B 71,86,071 3 Service Tax if leviable - 15% C=A*15% 59,90,077 4 Additional input tax credit D = (B-C) 11,95,994 24. The Respondents have also submitted that the DGAP had ignored the increase in the cost of construction during the Post-GST period due to which the ITC had also increased whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them due to increase in the cost of procurement of the materials and not on account of any additional benefit due to the advent of GST as has been shown in following table:- Name of Material Taxable Value of Procurements Total ITC availed Average Increase in Price Increase in ITC due to Increase in Price Granite 41,58,094 8,44,507 2.54% 20,919 Marble 1,86,22,322 42,80,624 2.54% 1,06,035 RMC 2,72,11,845 48,98,133 5.18% 2,41,228 Steel 1,39,41,299 25,09,434 21.60% 4,45,755 Total 6,39,33,560 1,25,32,698 8,13,937 27. The Respondents have further submitted that despite increase in the cost of construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,929 sq. ft. However, the area sold relevant to the taxable turnover of that period was 1,19,364 sq. ft. Therefore, the DGAP had considered proportionate CENVAT credit of Rs. (₹ 2,83,54,883/- (₹ 4,72,55,526, * 1,19,364 / 1,98,929). Similarly, for the Post-GST period, the DGAP had worked out the proportionate ITC as ₹ 4,74,03,270/-(6,04,47,206) * 1,56,002 / 1,98,929). They have claimed that the computation made in the Post-GST period by the DGAP was incorrect inasmuch as the area sold relevant to the taxable turnover of ₹ 64,76,43,664/- for the period from July-17 to Aug-18 was only 88,100 sq. ft. They have also claimed that the DGAP had considered the area pertaining to total sales even if no demand was raised for the same during July-17 to Aug-18. The Respondents have submitted the following details demonstrating the impact of change in sold area as follows:- Particular Pre-GST Post-GST Cenvat/ITC 3,10,37,856 1,13,24,684 Turnover 1,54,72,73,098 64,76,43,664 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified rate must be considered as tax rate . Accordingly, they have claimed that the DGAP in Table-D of the Report had stated that the increase in the tax rate was only 6.5% [12% GST - (4.5% service tax + 1% VAT)], however, the DGAP had not given any findings on such increase in the rate of tax. The Respondents have further claimed that in the Post-GST period, the rate of tax on construction service was specified under Entry No. 3 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as 18%, but for determining the value, the said notification prescribed abatement of 1/3rd of the value of agreement towards land. Thus, if the agreement value was ₹ 100/, 18% tax was payable on ₹ 67/-. They have also pleaded that as per the judgment passed in the case of Larsen Toubro Ltd. v. State of Karnataka others reported in 2014 (34) STR 481 (SC) = 2013 (9) TMI 853 - SUPREME COURT service provided by the builder/developer had been classified as works contract, therefore, the value of land included in the price was required to be excluded to arrive at the taxable value under Section 15 of CGST Act, 2017. They have further pleaded that the rate of tax was always applied on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he GST and after coming into force of the CGST Act 2017 it was levied GST w.e.f. 22.09.201Z The Respondent was also made eligible to avail ITC w.e.f. the above date. However, ITC claimed by the respondent was not sufficient to meet his output tax liability and he had to pay the balance amount of tax in cash as is evident from the perusal of the table prepared by the DGSG. It is also apparent from the returns filed by the respondent for the months of September 2017 October 2017 and November, 2017 that the ITC available to him as a percentage of the total value of taxable supplies was between 2.69% to 3% whereas the GST on the outward supply of his product was 5% which was not sufficient to discharge his tax liability. Moreover in this case the rate of tax has been increased from 0% to 5% instead of reduction in the same. Therefore, there appears to be no reason for treating the price fixed by the respondent as violation of the provisions of the Anti-Profiteering clause. 34. The Respondents have also contended that the DGAP in para 21 of the Report had computed that the total GST benefit which had to be passed on to the buyers of the flats was ₹ 4.17 Crores which included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected as specified in 3rd row was ₹ 2,13,231/- whereas the total GST payable was ₹ 3,11,661/- and thus, on coming in to force of the GST, it could be seen from the Table that excess tax to be borne by the above Applicant was only ₹ 98,430/- as compared to ₹ 1,88,717/- as claimed by the DGAP in his Report. 35. The Respondents have further submitted that the credit figures appearing in the Post-GST period in Table-D might be reduced once the Completion Certificate of the project would be received. The Respondents have also quoted Schedule-Ill Sale of land and subject to clause (b) of para 5 of Schedule-Il, sale of building which is neither supply of goods nor supply of service. Para 5 (b) of Schedule-II reads as follows: (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. On the basis of the above provisions the Respondents have claimed that once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of VAT Service Tax for the Pre-GST period was submitted by the Respondents on 11.01.2019 and on verification, it was observed that there was no direct relation of turnover reported in the VAT returns for the period from April, 2016 to June, 2017 filed by the Respondent with the amount collected from home buyers. This was because the Respondents were paying VAT @ 1% under Composition Scheme without any credit of VAT on inputs and were not collecting the same from the home buyers. The value shown in the VAT returns was the total agreement value of the flats booked in the return period and was not related to the actual amount collected from the home buyers. Therefore, the VAT turnover had not been considered for computation of the ITC ratio to taxable turnover for the Pre-GST period. 39. The DGAP after examination of the documents submitted by the Respondents during the hearing held on 10.01.2019 and to him, has claimed to have re-examined his Report dated 28.11.2018 and stated that after considering the revised details of the area sold relevant to the taxable turnover by the Respondent as per the home-buyers list and the details of other charges collected in the Pre-GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ITC as a percentage of the total turnover that was available to the Respondents during the Pre-GST period (April, 2016 to June, 2017) was 1.51% and during the Post-GST period (July, 2017 to August, 2018), it was 4.13% which clearly confirmed that Post-GST, the Respondents had benefited from additional ITC to the tune of 2.62% [4.13% (-) 1.51%] of the taxable turnover. On the basis of revised details of the comparative figures of ITC availed/available during the Pre-GST period and the post-GST period, the DGAP has computed the excess collection or the profiteered amount as under:- Table-F (Amount in Rs.) S. No. Particulars Pre-GST Post- GST 1. Period A April, 2016 to June, 2017 July, 2017 to August, 2018 2. Output tax rate (%) B 5.50% 12.00% 3. Ratio of CENVAT/ Input Tax Credit to Taxable Turnover as per Table - A above (%) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by the Respondents from the above Applicant and the other home buyers during the period from 01.07.2017 to 31.08.2018, the amount of benefit of ITC which had not been passed on by the Respondents to the recipients or in other words, the profiteered amount came to ₹ 1,90,04,456/- which included GST @ 12% on the base profiteered amount of ₹ 1,69,68,264/-. The DGAP has also submitted the home buyer and unit no. wise break-up of this amount in Annex-19 (Revised). Further, the DGAP has further stated that the above amount was inclusive of ₹ 37,065/- (including GST on the base amount of ₹ 33,093/-) which was the profiteered amount in respect of the Applicant No. 1, mentioned at Serial No. 16 of Annex-19 (Revised). 43. The DGAP also mentioned that the above computation of profiteering was with respect to 92 home buyers whereas the Respondents had booked 166 flats till 31.08.2018. He has further mentioned that out of the 166 booked flats, 74 customers who had booked the flats till 31.08.2018 had not paid any consideration during the period from 01.07.2017 to 31.08.2018 (Post-GST period under investigation), therefore, if the ITC in respect of these 74 units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on. List Attached as Annex-21 4 Other Than Applicant 74 67,902 - 0 1,29,33,148 (1,29,33,148) No Consideration Paid Post-GST, However, Respondent passed on benefit. List Attached as Annex-22 5 Other Than Applicant 46 42,927 - - - - Unsold Units as on 31.08.2018 Total 212 1,98,929 64,76,43664 1,90,04,456 3,06,25,327 (1,17,74,122) - 45. The DGAP has also submitted from the above Table that the benefit claimed to have been passed on by the Respondents was less than what they should have passed on in respect of 31 cases (Sr. 2 of the above Table) amounting to ₹ 1,00,18,637/-. The details of these amounts are given in Annex-20 (Revised DGAP Report). The benefit claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the present proceedings. These recipients were identifiable as per the documents on record and therefore, this additional amount of ₹ 1,90,04,456/was required to be returned to such eligible recipients, he has contended. 47. The revised Report dated 22.01.2019 furnished by the DGAP was considered by the Authority and it was decided that the Applicants and the Respondents be asked to appear before the Authority on 06.02.2019 as substantial changes have been made by the DGAP while calculating the profiteered amount as compared to his earlier Report dated 08.11.2018. Since, the Respondents had asked for adjournment of the hearing scheduled on 06.02.2019, it was decided to accord next hearing on 11.02.2019. During the hearing, the Respondents have filed submissions dated 11.02.2019 on the DGAP s revised Investigation Report. 48. It is observed that most of the objections raised by the Respondents vide their submissions dated 11.02.2019 are those which have already been taken on record. However, in addition the Respondents have contended that they had not done profiteering as was evident from Table-C of para 9 of the revised DGAP Report which stated that the profiteere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst his service tax liability for the succeeding month or quarter and not in the subsequent months. The contention of the appellant is that the benefit of the same should be extended to the subsequent months after the succeeding month. It is a well-settled legal principle that the statute should be interpreted as it is even if the intention is imperfect, imprecise or there is an obvious omission. Even though the appellants have not specifically intimated the department in this regard, but adjustment was declared in their ST3 returns, accordingly intimation of such adjustment stands made to the department. Even if it is not adhered to, at the most it is a procedural lapse and merely for this procedural lapse the excess amount paid could not be deviated and cannot be permitted to be retained by the Government. Section 13 of the General Clauses Act, 1897 provides that singular include the plural. Accordingly, month includes months. Further the case laws relied on by the appellants are squarely applicable to the facts of the present case. The issue stands settled against the Revenue and in favour of the appellant-assessee. In view of the above, I am of the considered view that the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PROJECT NAME TOTAL AREA (SFT) AREA SOLD GST BENEFIT (SGT) GST BENEFIT AMOUNT PASSED (RS.) 1 ALLURA 5,47,688 4,30,623 10,40,11,177 2 ALTAMOUNT 1,27,430 51,120 1,13,75,867 3 AMARA 25,22,222 20,36,427 23,53,62,303 4 AZZURO 2,64,228 66,913 2,95,06,203 5 BELMONDO 8,18,387 2,43,207 62,45,252 6 CENTRAL PARK / DOWN TOWN/ CODENAME EPIC 39,65,260 22,56,421 13,69,12,008 7 CODENAME FINALE 2,42,592 1,75,634 2,98,99,928 8 CODENAME TRINITY 6,29,679 1,96,394 4,89,86,319 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration of Non-construction related turnover in the Pre-GST period:- The DGAP has stated that the turnover taken for computation of ITC percentage in the Pre-GST period had excluded non-construction related turnover. iv. On the issue of Increase in ITC due to increase in rate of GST chargeable on services:- The DGAP has stated that in the Report dated 28.11.2018, the ITC availed by the Respondents as a percentage of the Respondents total turnover, both in the Pre-GST and Post-GST periods, had been quantified and compared to determine whether there was any benefit of ITC. The input or input service wise availability of ITC, either prior or post implementation of GST, had not been examined by the DGAP . 53. The Respondents vide their submissions dated 09.04.2019 have stated that they had already supplied the required information and explanation regarding the Pre-GST and the Post-GST data/figures from time to time and the matter may be decided in view of their previous submissions. 54. We have carefully considered all the Reports filed by the DGAP, the submissions made by the Respondents and the other material placed on record and find that the Applicant No. 1 had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2017 should not be fixed along with imposition of penalty as per Sections 122-127 of the above Act read with Rule 133 of the CGST Rules, 2017 and their registration under the above Act should also not be cancelled. 56. It is also apparent from the record that the DGAP has submitted revised investigation Report dated 22.01.2019 in which he has stated that after taking in to account the revised details of the area sold by the Respondents, the ITC availed and the Respondents taxable turnover during the period from April, 2016 to June, 2017 (i.e. Pre-GST) and during the period from July, 2017 to August, 2018 (i.e. Post-GST), the ratio of CENVAT/ITC to the taxable turnover, Pre-GST was 1.51% and during the Post-GST period, it was 4.13% which showed that PostGST, the Respondents have benefited from the additional ITC to the tune of 2.62% [4.13% (-) 1.51%] of the taxable turnover which was required to be passed on to the buyers by the Respondents. The revised ratio calculated by the DGAP has not been challenged by the Respondents, moreover the same is based on the information supplied by the Respondents which has been duly verified by the DGAP and therefore, the same is being treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been sold by the Respondents. Out of the above 166 flat buyers the Respondents have received consideration Post-GST, only from 92 flat buyers. Therefore, the ITC benefit is required to be passed on to the 92 buyers only at this stage and benefit should be passed on to the other buyers at a later stage when payments are received from them. 59. The DGAP has further mentioned that the Respondents had passed on the benefit of ₹ 3,06,25,327/- to the 166 flat buyers (Table G supra). The DGAP has also stated that the benefit claimed to have been passed on by the Respondents was less than what they should have been passed on in respect of 31 cases (Sr. 2 of the Table G mentioned supra) amounting to ₹ 1,00,18,637/- (Annexure-20 of the revised Report) and the benefit claimed to have been passed on by the Respondents was higher (Annexure-21 of the revised Report) as compared to what they should have passed on in respect of the 60 recipients of the flats (Sr. 3 of Table G mentioned above) amounting to ₹ 87,06,360/-. He has further contended that the Respondents have also stated to have passed on the benefit amounting to ₹ 1 ,29,33,148/- in respect of 74 buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings and since they were identifiable as per the documents furnished by them therefore, an amount of ₹ 1,00,18,637/- required to be returned to such eligible buyers after deducting an amount of ₹ 60,20,130/- which had been paid by the above Respondents as discount to them. As already mentioned supra discount cannot be considered as the benefit of ITC and hence the above amount of ₹ 1,60,38,767/- is ordered to be returned to the above buyers with interest. Similarly an amount of ₹ 29,28,624/(Table G) profiteered by the Respondents from 60 house buyers is also required to be returned to them without deducting the amount which has been passed as discount. An amount of ₹ 1,29,33,148/(Table G) which has been claimed to have been passed on as benefit of ITC to 74 house buyers and which has been mentioned as discount by the Respondents in their submissions and the credit notes shall also not be considered as such benefit as it has been given by the above Respondents from their own profit margins and shall not be adjusted against the benefit of ITC which may accrue to them in future. 62. The Respondents have also contended that they were not in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived after 01.07.2017. Further the Authority under Rule 126 of the CGST Rules, 2017 has already notified the Procedure Methodology for determination of the profiteered amount vide its Notification dated 28.03.2018 however, as has been stated above the same has to be applied on case to case basis. It would also be appropriate to mention here that this Authority has power to determine the methodology and not to prescribe it as per the provisions of the above Rule and therefore, no set prescription can be laid while computing profiteering. Accordingly, the claims made by the Respondents that the profiteered amount could not be computed by applying ratio of ITC to turnover as both could not be matched as they accrued at different periods of time is incorrect. Hence the objection raised by the Respondent on this ground is frivolous and without legal force. 64. The Respondents have also submitted copies of the credit notes and the ledger account of the above Applicant and other house buyers vide their submissions dated 20.02.2019 to whom they have claimed to have passed on the additional benefit of ITC. The details of these house buyers are as under:- S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,13,154 9 Raju Nanwani Discount 05-10-2018 1,68,364 SGST CGST Credit 28-01-2019 20,204 1,88,568 10 K. Kadhiravan Discount 05-10-2018 1,90,316 SGST CGST Credit 28-01-2019 22,838 2,13,154 65. It is clear from the above Table that the Respondents vide their first credit notes dated 05.10.2018 had released discount to the above Applicant as well as to the other house buyers which cannot be considered as passing on of the benefit of additional ITC as the above discount has been given by the Respondents from their own profit margins and not on account of the benefit of ITC. The entry of discount made in the credit notes itself proves that this amount has not been paid on account of the ITC benefit. Accordingly, the discount of ₹ 1,90,316/- paid to the above Applicant can also not be considered as the benefit of ITC. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iteered amount as per the order passed in the case of M/s. Schwing Stetter (India) Pvt. Ltd. supra can also not come to the aid of the Respondents as facts of both the cases are different as in the above case the Appellants were requesting for adjustment of the extra tax paid by them whereas the present case pertains to the profiteered amount and not the tax. Accordingly, the excess amount which the Respondents have claimed to have paid as ITC benefit to the house buyers cannot be adjusted against the benefit due to either other house buyers or against their future entitlement or against the total profiteered amount computed by the DGAP as the same is required to be passed on to each such recipient as per the provisions of Section 171 (1) of the above Act. Similarly the case of Larsen Toubro supra also does not support the case of the Respondents as the DGAP has not included the value of land while calculating the Pre and Post-GST rates of tax levied on them. The DGAP has taken Service Tax, VAT (Total 5.5%) during the Pre-GST period and GST @12% during the Post-GST period and correctly arrived at the figure of 6.5% as the increase in the rate of tax vide Table-B of his revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying the additional benefit @2.62% is determined as the profiteered amount including the GST as per the provisions of Rule 133 (1) of the above Rules. The Applicant No. 1 shall be entitled to the ITC benefit of ₹ 37,065/- including the GST and rest of the house buyers would be eligible to get ITC benefit of ₹ 1,89,67,391/- including the GST along with the interest to be calculated @18% from the date of realisation of the above amount till it is paid. The Respondents shall not adjust the amount of discount or the SGST CGST credit offered by them out of their own profit margins on account of the reduction in the cost or due to slow down in the market against the ITC benefit to be paid to the house buyers. The DGAP shall accordingly, re-compute the amount to be passed on to all the eligible house buyers and convey the same to the Respondents and the Commissioners SGST and CGST as well as this Authority. 71. The Respondents have also claimed that the DGAP had wrongly taken area sold in the Post-GST period as sq. ft. in Table-C of his Report dated 28.11.2018 whereas actually an area of 88,100.00 sq. ft. had been sold during the above period and in case this area wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITC of 2.62% Post-GST to the Respondents which is required to be passed on by them. 74. The Respondents have also submitted that the computation of the Service Tax and the GST to be paid by the Applicant No. 1 in Table-A of the Report dated 28.11.2018 was wrong. Since, the DGAP has revised the profiteered amount to be paid to the above Applicant therefore, the above claim of the Respondents is irrelevant. 75. The Respondents have also submitted that they would have to reverse the ITC after issuance of the Completion Certificate as per Schedule-III subject to clause (b) of para 5 of Schedule-II as well as Section 17(3) of the above Act. As the Completion Certificate has not been obtained by the Respondents therefore, the above provisions are not applicable in their case. 76. It is established from the perusal of the above facts of the case that the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondents as they have profiteered an amount of ₹ 1,90,04,456/- inclusive of GST @ 12% on the base profiteered amount of ₹ 1,69,68,264/-. The Respondents have also realized an additional amount to the tune of ₹ 37,065/- from the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on by the Respondents are as under:- Sr.No. PROJECT NAME TOTAL AREA (SFT) AREA SOLD GST BENEFIT (SGT) GST BENEFIT AMOUNT PASSED (RS.) 1 ALLURA 5,47,688 4,30,623 10,40,11,177 2 ALTAMOUNT 1,27,430 51,120 1,13,75,867 3 AMARA 25,22,222 20,36,427 23,53,62,303 4 AZZURO 2,64,228 66,913 2,95,06,203 5 BELMONDO 8,18,387 2,43,207 62,45,252 6 CENTRAL PARK / DOWN TOWN/ CODENAME EPIC 39,65,260 22,56,421 13,69,12,008 7 CODENAME FINALE 2,42,592 1,75,634 2,98,99,928 8 CODENAME TRINI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose covered in the said report, it may, for reasons to be recorded in writing, within the time limit specified in sub-rule (1), direct the Director General of Anti-profiteering to cause investigation or inquiry with regard to such other goods or services or both, in accordance with the provisions of the Act and these rules. (b) The investigation or enquiry under clause (a) shall be deemed to be a new investigation or enquiry and all the provisions of rule 129 shall mutatis mutandis apply to such investigation or enquiry. 80. The Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondents as ordered by the Authority is passed on to all the eligible buyers. A report in compliance of this order shall be submitted to this Authority by the Commissioners CGST /SGST within a period of 4 months through the DGAP from the date of receipt of this order. 81. It is also revealed from the Report dated 28.11.2018 that the DGAP vide Col. No. 5 of Table-C had taken the Total Taxable Turnover as per returns (E) for the Pre-GST perio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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