TMI Blog2022 (5) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... be imposed on him. The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC is passed on to each homebuyer as per this Order along with interest @18%. In this regard an advertisement of appropriate size (visible enough to public at imminent page) may also be published by the concerned Commissioner in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent) - JMD Limited, Project- JMD IMPERIAL SUITS Location- Gurugram. Haryana and amount of profiteering Rs. 33,35,330/- so that the concerned homebuyers can claim the benefit of ITC if not passed on. This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017. - Case No. 13/2022 - - - Dated:- 13-5-2022 - SH. AMAND SHAH, TECHNICAL MEMBER CHAIRMAN, SH. PRAMOD KUMAR SINGH, TECHNICAL MEMBER SH. HITESH SHAH, TECHNICAL MEMBER Present:- 1. None for the Applicant No 1. 2. None for Respondent 3. None for DGAP ORDER The present Report dated 26.08.2021 has been received from the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T towards M/s JMD and fully satisfied with the aforesaid Settlement Agreement. We hereby withdrawal his above cited complaint and further confirm declare that no amount was pending on any account whatsoever towards M/s JMD Limited including GST/VAT. There had been no mention of as to how the subject issue had been sorted out and also as to how the benefit of ITC to be passed on had been worked out and the quantum of benefit passed on to the above Applicant in the Applicant's withdrawal letter referred to above. However, on verification of the documents / information submitted by the Respondent from time to time, it had been observed that the Respondent had availed additional benefit of ITC under the GST regime, the benefit of the same had to be passed on to the recipients u/s 171 of CGST Act. The Standing Committee on Anti-profiteering in its 28th meeting held on 26.05.2020 have observed that In the present meeting, a total of 38 complaints appear to have Pan India ramification or had been recommended by the State Screening Committees for further investigation. These were discussed by the Committee and found to have sufficient and necessary prima facie evidence of prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein, it was stated that in cases where the limitation would had expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall had a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, was greater than 90 days, that longer period shall apply . The above relief had been extended and the period from 14.03.2021 till further orders shall also stand excluded in computing the limitation period as per the Hon'ble Supreme Court's Order dated 27.04.2021 passed in Miscellaneous Application No. 665/2021 in SMW(C) No. 3/2020. 10. The DGAP has also reported that in response to the Notice dated 30.06.2020, the Respondent submitted his reply vide letters/emails dated 13.07.2020, 05.08.2020, 14.08.2020, 27.08.2020, 02.12.2020, 21.12.2020, 31.12.2020, 12.01.2021, 15.01.2021, 29.01.2021, 25.02.2021, 01.03.2021, 23.03.2021, 09.06.2021 and 25.06.2021. 11. The DGAP has stated that the vide the aforementioned letters/e-mails, the Respondent submitted the following documents/information: (a) Copies of GSTR-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Spring Foundation vide conveyance deed dated 30.06.2014 for which application for change of developer was filed and was under process. 13. The DGAP has reported that the said FSI of 1,00,368 sq.ft. was jointly owned by the Respondent along with Mr. Sushil Kumar Daima Ors.(mentioned as sandwood in the records of the Respondent) in the ratio 50:50 and thereafter they had mutually entered into a collaboration agreement for development of the said FSI into commercial building, wherein it was mutually agreed that both parties shall contribute their respective shares as 50% towards all expenses pertaining to the cost of construction and sale proceeds out of the same shall be shared as 50:50. The Respondent further submitted that no area had been booked / sold out of the aforesaid area. 14. The Respondent further submitted that the aforesaid combined FSI of 3,22,989 sq.ft. (approx.) was one project (Suburbio-67, otherwise also called as Suburbio-1) and that the Occupancy Certificate was granted for the entire project vide Memo No. ZP-347/SD(BS)/2018/29796 dated 18.10.2018 by the DTCP, Haryana. The Respondent vide his submission dated 14.08.2020 submitted that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as was attributable to the said taxable supplies including zero-rated supplies . Section 17 (3) The value of exempt supply under sub-section (2) shall be such as might be prescribed and shall include supplies on which the recipient was liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building . 18. The DGAP has also submitted that the in response to the Notice of Initiation of investigation dated 30.06.2020 and subsequent reminders, the Respondent vide his submission dated 09.06.2021 provided the details of turnover and CENVAT credit /ITC availed for all the projects as mandated under erstwhile CENVAT Credit Rules 2004, present CGST Rules 2017 RERA regulations. The Respondent vide his submission dated 14.08.2020 further submitted that the provisions of the RERA Act, 2016 were not applicable to the subject project SUBURB10-67 (Suburbio-1) because they had filed the application for Occupancy Certificate b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 29.01.2021 wherein it was communicated that he had not taken VAT input for the period April, 2017 to June, 2017. Accordingly, the credit of VAT for the period April, 2016 to June, 2017 was considered as Rs. 3,66,212/- for the purpose of computation of the element of profiteering. Further, post-GST, the Respondent could avail the ITC of GST paid on all the inputs and input services. From the information submitted by the Respondent for the period April, 2016 to May, 2020, the details of the ITC availed by them, his turnover from the project SUBURB10-67 (Suburbio-1) and the ratios of ITC to the turnover, during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to May, 2020) periods was calculated and was furnished in Table-A' below: Table-A S.N. Particulars Total (Pre-GST)(April, 2016- June, 2017) Total (Post-GST)(July, 2017- May, 2020) 1. CENVAT of Service Tax Paid on Input Services used for flats (A) 47,33,809 - 2. Input Tax Credit of VAT Paid on Purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards value of land, effective GST rate was 12% on the gross value), vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. 24. As per the DGAP on the basis of the figures contained in Table- 'A' above, the comparative figures of ITC availed/available as a percentage of the turnover in the pre-GST and post-GST periods and the recalibrated basic price as well as the excess collection (profiteering) during the post-GST period, has been tabulated in Table- B' below: Table-B S.N. Particulars Post-GST 1. Period A July, 2017 to May, 2020 2. Output GST rate (%) B 12% 3. Ratio of CENVAT credit to Total Turnover in pre GST period as per Table - 'A' above (%) C 3.26% 4. Ratio of ITC to Total Turnover in post GST period as per Table - 'A' above (%) D 9.89% 5. Increase in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profiteered amount comes to 33,35,330/- which included GST. The buyers (of flats sold upto the receipt of the date of Occupancy Certificate and payment made thereon upto 31.05.2020) and unit no. wise break-up of this amount has been given in Annex-22 for Project SUBURBIO-67 (Suburbio-1) . 27. The DGAP has claimed that The Respondent did not claim to have passed on the benefit of ITC to any of the home buyers, which was corroborated from the home buyers list submitted by the Respondent. Hence it was treated as `NIL in respect of the Project. 28. The DGAP has also submitted that above computation of profiteering was with respect to 150 home buyers amongst all the customers as on 31.05.2020 in the project Suburbio-67(Suburbio-1) in whose case demands had been raised post-GST. As seen from the submissions made by the Respondent, it was observed that the Project Suburbio-67 (Suburbio-1) comprised of 694 units in all (Total 254 sold, 440 unsold). Out of which 519 units were under exclusive ownership of the Respondent and the balance units 175 units were under the joint ownership with Mr. Sushil Kumar Daima Ors. Out of the 694 units in the project, 252 units were sold prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case. 32. The above Report of the DGAP was considered by this Authority in its sitting held on 23.02.2022 and it was decided to direct the Respondent and the Applicant No. 1 to file their consolidated written submissions in respect of the report of the DGAP by 15.03.2022. However, the Applicant No. 1 did not file his written submissions. The Respondent has filed his written submissions dated 05.04.2022, vide which he has stated:- i. That Vishal Garg Applicant No.1 and Mrs. Payal Garg had withdrawn their Complaint vide letter dated 13.07.2020 filed against the Respondent. ii. That facts mentioned in Point No. 21 i.e Ratio of Input Tax Credit Pre- GST (April 2016 to June 2017) 3.26% and Ratio of Input Tax Credit Post GST (July 2017-May 2020) 9.89% and Point 24 i.e. Excess Collection of Demand or Profiteering Post GST July 2017-May 2020) Rs. 33,53,330/- were not true and fair as per records submitted by the Respondent before the DGAP. iii. That facts as mentioned in Point No. 25 of the Report (F.No. 22011/API/48/2020/1590) dated 26th August 2021 i.e the Input Tax Credit of 6.63 of the turnover should have resulted in commensurate reduction in the basic price as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the above Applicant, the investigation has been carried out in the best interest of upholding the letter and spirit of the provisions of Section 171 of the CGST Act, 2017. b) that the Cenvat Credit of Service Tax paid on input Services from 01.04.2016 to 30.06.2017 and Input Tax Credit under GST for the period 01.07.2017 to 31.05.2020 in respect of the subject project i.e. SUBURBIO -67 (SUBURBIO-I) had been considered from the project wise bifurcation of turnover and CENVAT credit/ITC availed for all the projects as submitted by the Respondent vide Annexure -I appended to letter dated 09.06.2021. Further, Input Tax Credit of VAT for the period 01.04.2016 to 30.06.2017 had been considered as Rs. 3,66,212/- based on the Order No. 886/2016-17 dated 27.02.2020 issued under Haryana Value added Tax, 2003 by the Excise and Taxation Officer-cum-Assessing Authority, Gurugram along with Input Credit project-wise submitted by the Respondent vide Annexures -6 appended to the letter dated 15.01.2021. The DGAP has also claimed that the turnover for the period 01.04.2016 to 30.06.2017 in the pre-GST era and for the period 01.07.2017 to 31.05.2020 in the post-GST era has been taken from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left pending on any account whatsoever including GST/VAT towards M/s JMD and fully satisfied with the aforesaid Settlement Agreement. We hereby withdrawal his above cited complaint and further confirm declare that no amount was pending on any account whatsoever towards M/s JMD Limited including GST/VAT. In this regard, the Authority finds that there is no provision envisaged under the CGST Act, 2017 or the Rules there under to drop verification/Investigation of profiteering once the Complainant/Applicant withdraws his complaint. The same analogy was being followed by the DGAP in all the cases and accordingly the investigation was continued once the recommendations of the State Screening Committee and Standing Committee were received. The Authority finds that the quantum of benefit passed on to the Applicant is not mentioned in the Applicant's withdrawal letter. The Standing Committee had forwarded this case with the comments found to have sufficient and necessary prima facie evidence of profiteering . Hence, despite the withdrawal of complaint by the Applicant, the investigation was carried out by the DGAP in the best interest of upholding the letter and spirit of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is clear from the plain reading of Section 171 (1) that it deals with two situations :- one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post GST period. Hence, the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue it has been revealed from the DGAP's Report that 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 3.26% and during the post-GST period (July-2017 to May-2020), it was 9.89%. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 6.63% (9.89%-0.3.26%) of his turnover and the same was required to be passed on to all eligible flat buyers. The DGAP has calculated the amount of ITC benefit to be passed on to all the eligible flat buyers as Rs. 33,35,330/- on the basis of the information supplied by the Respondent and hence the amount of profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Parkash Vanjani jaya Vanjani 6,630 7. Mohit Kumar Gupta Monica Gupta 13,744 8. Anuj Yadav 15,517 9. Gurdeep Singh Arora 21,085 10. Karishma Finishers Pvt. Ltd. 35,071 11. Anshu Mahajan 17,748 12. Ramesh Chand Juneja Aruna Juneja 16,954 13. Sudhir Gupta 36,456 14. Rakesh Arora Seema Arora 21,062 15. Vivek Tyagi 20,387 16. Prem Lata Dhir 18,749 17. Aditya Karwa 21,063 18. Jagriti Exim Pvt Ltd 2,296 19. Jagriti Exim Pvt Ltd 3,302 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26,656 48. Anu Yadav 9,074 49. Naresh Kumar Yadav 28,172 50. Dr. Ashish Rustogi 13,502 51. Parveen Dang 16,883 52. Shashi Saxena Satish Kumar Saxena 19,356 53. Ramesh Chand Juneja 8,715 54. Rajeev Arora Shikha Arora 14,030 55. Pawan Gupta Alpna Gupta 25,932 56. Kulwant Singh Raman Preet Kaur 21,870 57. Chandervati 5,454 58. Punam Malhotra Prachi Maihotra 23,624 59. Shweta Arora 16,272 60. Manisha Anand 17,917 61. Suman Yadav 29,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90. Kuldeep Singh 11,798 91. Kuldeep Singh 26,430 92. Anand Kumar Singhal 25,795 93. Anand Kumar Singhal 10,503 94. Ranjit Singh Jolly Arvinder Kaur Jolly 3,850 95. Ranjit Singh Jolly Arvinder Kaur Jolly 4,036 96. Harvinder singh Lamba Tejinder Lamba 4,711 97. Harvinder singh Lamba Tejinder Lamba 3,526 98. Tarun Agarwal 23,332 99. Sunder lal 1 23,360 100. Rajesh Khanna Shashi Khanna 14,408 101. Virender Arora 26,740 102. Parveen Gandhi 12,054 103. Kamal Yadav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,134 133. Kirti Gupta Shashank Goel 13,527 134. Mrs. Chitra Khosla through GPA holder Mr.. Ashwani Kumar Khillan 2,511 135. Parul Khanna Prakash Param Prakash 13,480 136. Ramesh chand Juneja 10,559 137. Rajesh Kumar Jain (HUF) 8,361 138. Rajesh Kumar 12,054 139. Parkash Vanjani Jaya Vanjani 7,819 140. Rajeev Kukreja / Amita Kukreja 13,395 141. Alok Verma 2,864 142. Gopal Sharma 8,114 143. Sudershan Narang R.K. Narang 9,505 144. Arun Grover 9,412 145. Dr. Manisha 9,505 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority's website www.naa.gov.in. Contact details of concerned Jurisdictional CGST/SGST Commissioner responsible for compliance of the NAA's order may also be advertised through the said advertisement. Such an advertisement will help ensure that is compiled with mandate of Section 171 (2) of the CGST Act and will be a step to make certain that the benefit due to every eligible recipient is received by him from the Respondent. 47. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this Order to this Authority and the DGAP within a period of four months from the date of receipt of this Order. 48. Further, the DGAP is also directed to monitor the compliance of this order by the concerned jurisdictional CGST/SGST Commissioner. 49. A copy of this Order be sent free of cost to the Applicant No.1, the Respondent, Commissioners CGST/SGST Haryana, the Principal Secretary (Town and Country Planning), Government of Haryana as well as Secretary, Haryana RERA for necessary action. 50. Further, the Hon'ble Supreme Court, vide its Order dated 23.03.2020 in Suo Moto Writ Petition CC No. 03/2020, while taking suomoto cognizan ..... 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