TMI Blog2020 (2) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 to March-2019), it was 0.39%. On this basis, the DGAP has reported that the Respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period and therefore it does not qualify to be a case of profiteering - there are no reason to differ from the Report of DGAP and we therefore agree with his findings that the the provisions of Section 171 of the CGST Act 2017 have not been contravened in this case. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Therefore, the allegation that the Respondent has not passed on the benefit of ITC in this case is not found sustainable. Accordingly, the application filed by Applicant No. 1, requesting action against the Respondent for alleged violation of the provisions of Section 171 of the CGST Act, is dismissed as not maintainable. - Case No. 06/2020 - - - Dated:- 25-2-2020 - SH. B.N. SHARMA, CHAIRMAN, SH. J.C. CHAUHAN, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER Present:- 1. Sh. Paramjeet Rathee the Applicant No. 1 in person. 2. None for the Applicant No. 2. 3. Sh. Sunil K. Verma, Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent did not avail of the said opportunity. Vide e-mail dated 07.03.2019 (Annex-4), the Applicant No. 1 was also given an opportunity to inspect the non-confidential evidence/reply furnished by the Respondent on 13.08.2019 or 14.08.2019. However, the Applicant No. 1 did not avail of the said opportunity. The DGAP has stated that the investigation in this case had been carried out for the period from 01.07.2017 to 31.03.2019 and the time limit to complete the investigation was extended up to 26.09.2019, by this Authority, in terms of Rule 129(6) of the Rules, vide Order F.No. 22011/NAA/19/2018/3819 dated 19.06.2019 ( Annex-5 ). 5. In his Report the DGAP has stated that in response to the notice dated 09.04.2019, the Respondent replied vide letters/e-mails dated 10.05.2019 ( Annex-6 ), 18.062019 ( Annex-7 ), 22.07.2019 ( Annex-8 ), 07.08.2019 ( Annex-9 ) and 08.08.2019 ( Annex-10 ). Vide the aforementioned letters, the Respondent also submitted the following documents/information:- (a) Copies of GSTR-I GSTR-3B Returns for the period July, 2017 to March, 2019. (b) Copies of GSTR-3B Returns for the period July, 2017 to December, 2018. (c) Copies of Tran-I Retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 5,06,430 4 On casting of ground floor slab 03.02.2017 4,88,125 18,305 - 5,06,430 5 On casting of first floor slab 03.03.2018 4,88,125 - 58,575 5,46,700 Total 24,40,625 73,219 58,575 25,72,419 9. The DGAP in his Report has stated that another aspect to be borne in mind while determining the quantum of profiteering was that the ITC proportionate to the unsold units would have to be reversed once the completion certificate was obtained, as ITC in respect of such unsold units would have been claimed in the relevant months when inward supplies were received by the Respondent. He has also cited 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) which reads as Sale of land a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of land value), vide Notification No.11/2017-Central Tax (Rate) dated 28.06.2017. This showed that upon the introduction of GST w.e.f. 01.07.2017, the applicable tax rate on the construction services supplied by the Respondent had gone up from 5.5% to 12%. 11. The DGAP in his Report has also mentioned that as per the details submitted by the Respondent, it appeared that prior to 01.07.2017, i.e., in the pre-GST era, the Respondent was eligible to avail CENVAT credit of Service Tax paid on the input services only and no CENVAT credit was available in respect of Central Excise Duty and VAT paid on the inputs. However, post-GST, the Respondent could avail ITC of GST paid on all inputs and input services. From the data submitted by the Respondent, the details of the ITC availed by the Respondent, his turnover from the project Officer Enclave , the ratio of ITC to the turnover during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to March, 2019) periods, has been furnished by the DGAP in Table- B below:- Table- B (Amount in Rs.) Sr.No. Particulars April, 2016 to June, 2017 (Pre-GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent and the percentage of ITC from July, 2017 to December, 2018 was also very low in percentage. 13. The DGAP has further stated that as per the Table-B above, the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 0.94% and during the post-GST period (July, 2017 to March, 2019), it was 0.39%. It was also observed from the above narrated facts that the rate of tax in the post-GST period was higher than the rate of tax in the pre-GST period. Therefore, it appeared that the Respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period. Therefore, the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 did not appear to be attracted to the present case. Based on the submissions made by the Respondent, it was also observed that the Respondent had supplied construction services in the State of Haryana only. 14. The DGAP has intimated that the Respondent has not contravened the provisions of Section 171 15. The above investigation Report was received by this Authority from the DGAP on 03.09.2019 and was conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Duty paid on inputs and no credit was available for VAT paid on inputs. However, in the post GST period, the Respondent could avail ITC of GST paid on all inputs and input services, which implied that free flow of credit was allowed. j) That the DGAP had considered the net benefit of ITC to compute the quantum of profiteering as per the Table mentioned in para No. 14 of the Report, but he has not considered the type of sale consideration i.e. Subvention plan or CLP Plan. Further, as was apparent from para No. 14 of the DGAP Report, in the GST regime, the Respondent could avail ITC of GST paid on all the inputs and the input services. However, the DGAP, while calculating profiteering has not considered the same through cost sheet pre GST and Post GST on the base price of ₹ 3550 in his case. k) That as construction has been stalled in the present scenario, so, post GST period, the Respondent had not raised demands on homebuyers, as there were cases of construction linked plan, so,. exact quantum of ITC in present scenario by concept of net benefit of ITC based on sales would be wrong and it should be compared based on construction work which has happened in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind the stage of completion of the project. 16. Supplementary Report was sought from the DGAP on the issues raised by the Applicant No. 1 through submissions dated 25.09.2019, under Rule 133(2A) of the CGST Rules, 2017. The DGAP vide his Report dated 14.10.2019 has stated:- a) That the Respondent has stated the facts which related to the booking and construction activities and hence they have no impact on profiteering. b) That during the post-GST era (i.e. the period covered under investigation), the construction activities were minimum and it was also corroborated by the fact that the demand raised in the post-GST was much lesser than the pre-GST period. c) That ratio of CENVAT/ITC availed by the Respondent had been compared with the total turnover for the period from April, 2016 to June, 2017 (i.e. pre-GST) and July, 2017 to March-2019 (i.e. post-GST) to work out the additional benefit of ITC available with the Respondent. d) That the Respondent had declared all the data submitted by him as confidential except allotment letter and ledger of the Applicant No. 1. e) That in para 11 of the DGAP Report dated 30.08.2019, the area had been mentioned in squar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there been a reduction in the tax rate in the post-GST period and therefore it does not qualify to be a case of profiteering. We find no reason to differ from the Report of DGAP and we therefore agree with his findings that the the provisions of Section 171 of the CGST Act 2017 have not been contravened in this case. 21. The Applicant No. 1 vide his above submissions has stated that the documents supplied by the Respondent to the DGAP during the investigation period had not been supplied to him. It is evident from the DGAP Report dated 30.08.2019 and supplementary Report dated 14.10.2019 that the Respondent in terms of Rule 130 has requested that all the date submitted by him except allotment letter and Applicant s ledger, were to be treated as confidential. Therefore, the confidential documents submitted by the Respondent had correctly not been supplied by the DGAP to the Applicant No. 1. 22. The Applicant No. 1 has further contended that while calculating profiteering, the DGAP has not considered the type of sale consideration i.e. Subvention Plan or CLP Plan, pre-GST impact of ITC on cost, Cost Sheet Performa for Goods/Services pre-GST and post-GST, Summary of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
