TMI Blog2022 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... 83%. This confirms that in the post-GST period. the Respondent has been benefited from additional ITC to the tune or 0.03% (2.83%-2.80%) of his turnover and the same is required to be passed on by him to the recipients of supply, including, the Applicant No. 1. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipients works out to Rs. 4,44,563/-. The DGAP has calculated the amount of ITC benefit to be passed on to all the eligible recipients as Rs.4,44,563/- on the basis of the information supplied by the Respondent. The Respondent has not disputed the methodology adopted by the DGAP or the amount of profiteering worked out by the DGAP. The names of such homebuyers along with unit number and the benefit already passed on is enclosed with this order as Annexure-A. The Authority concur with the DGAP report dated 31.12.2020. The Authority determines that the Respondent have profiteered by an amount of Rs. 4,44,563/- for the project 'Tower F' in the project Anmol Fortune-II during the period of investigation i.e, 01.07.2017 to 30.09.2019. The Authority has also taken note of DGAP verification report d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his application:- i. Duly filled in form APAF -1 ii. Copy of the demand letter. iii. Copies of the Agreement to sell and Agreement to construction iv, Summary or Agreement to sell and Agreement to Construction. v. Summary of the details of the Taxes. c) After receipt of the reference from the Standing Committee on Anti-profiteering. a Notice under Rule 129 of the Rules was issued by the DGAP on 23.10.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to his Recipients of services by way of commensurate reduction in prices of the flats and if so. to suo moto determine the quantum thereof and indicate the some in his reply to the notice as well as furnish all documents in support of his reply. The Respondent was also allowed to inspect the relied upon non-confidential evidence/information which formed the basis of the investigation between 30.10.2019 and 311.10.2019. The Respondent had availed the said opportunity and inspected the said documents on 19.11.2019. The Applicant No. 1 was also given opportunity to inspect the non-confidential documents/reply furnished by the Respondent between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fortune-I C 23.02.2006 05.10.2016 05.10.2016 Anmol Fortune-II F 08.02.2014 05.11.2018 05.11.2018 Anmol Fortune-III E 09.06.2014 In Progress Not Recevied ii. That the Flat sold to the applicant i.e. Mr. Atul Waichal was in F-Tower/Wing of the project Anmol Fortune-II and the occupation certificate for the same was received on 05.11.2018. The present investigation needs to be restricted to the Anmol Fortune -II only, since every tower was separately registered under RERA and thus making the same as different project. As per the provisions of Rule 133 (5) of the CGST Rules, 2017 National Anti-Profiteering Authority (NAA) has powers to ask the DGAP to investigate into the other projects or the company. iii. The Respondent vide letter dated 18.013.20210, stated that with respect to the customers who have booked flat on or after 01/07/2017, they have arrived at the negotiated sale price after considering the GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny or the documents submitted by the Respondent, it was observed that:- i. The Respondent vide their letter dated 18.08.2020 claimed that they had arrived at the negotiated sale price after considering the GST credit benefit in respect or units booked/sold after 01.07.2017. However. it is observed on perusal of Cost Sheet and Agreement For sale that in the Agreement nowhere it has been mentioned that the benefit of ITC of GST had been considered while arriving at total sale value. Moreover. the total value of the unit/flat as per Cost Sheet and Agreement for Sale was equal. Furthermore, as per Note 18 of Cost Sheet submitted by the Respondent, it was clearly mentioned as The information in that paper was issued in good kith; it may or may not constitute pan of the contract . The Respondent vide their reply dated 24.07.2020 has also claimed that they had passed on substantial amount of Rs. 58,65,423/- as the benefit of GST Input Tax Credit to the 117 customers in accordance with the requirements of Section 171 of CGST Act, 2017. This includes homebuyers who have hooked units after 01.07.2017. Hence, on one hand, the Respondent has claimed that in respect of such units they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,45,960 6. On completion of 21 st Floor Slab 27.07.2017 12,88.000 - - 1,54,560 14,42,560 7. On completion of 24 th Floor Slab 17.08.2017 12,88.000 - - 1,54,560 14,42,560 8. On completion of Terrace Floor Slab 14.11.2017 12,88.000 - - 1,54,560 14,42,560 9. On completion of Internal Flooring walls 14.10.2017 12,88.000 - - 1,54,560 14,42,560 10. On completion of Electrical Work Internal Painting 15.07.2018 12,88.000 - - 1,54,560 14,42,560 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective buyers by considering the proportionate benefit of additional ITC available to him post-GST. iv. Prior to implementation of GST w.e.f. 01.07.2017, the Respondent was eligible to avail CENVAT credit of Service Tax paid on Input Services. However, CENVAT credit of Central Excise duty paid on inputs wits not admissible as per the CENVAT credit Rules, 2004, in force at the material time. Vide reply dated 13.02.2020 the Respondent had stated that they had opted for MVAT Composition Scheme vide Notification No. VAT.1510/CR-65/Taxation-1 dated 09.07.2020, under which VAT was payable @ 1% on the agreement amount specified in the agreement or stamp duty in respect of said agreement under Bombay Stamp Act. 1958, whichever was higher. Therefore. the Respondent was not eligible for VAT credit in pre-GST period. Further post-GST, the Respondent could avail input tax credit of GST paid on all the inputs and input services including the sub-contracts. The Respondent submitted the details of input tax credit availed by them anti their turnover for the project Anmol Fortune II (Tower-F) during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to September, 2019) period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax rate and ITC available for the pre-GST period (April 2016 to June 2017) when Service Tax 4.5% with the post-GST period (July, 2017 to September, 2019) when the effective GST rate was 12% on construction Service. On the basis of the figures contained in Table- B above, the comparative figures of the ratio of ITC availed/available to the turnover in the pre and post-GST periods, recalibrated base price and the excess collection (profiteering) during the post-GST period has been tabulated by the DGAP in Table- C below: Table 'C' (Amount in Rs) S.No. Particulars Pre-GST Post-GST 1. Period A April, 2016 to June, 2017 July, 2017 to Sept, 2019 2. Output tax rate (%) B 4.5% 12.00% 3. Ratio of CENVAT/VAT/GST Input Tax Credit to Total Turnover as per Table -B above (%) C 2.80% 2.83% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of input tax credit not passed on to the recipients or in other words, the profiteered amount comes to Rs. 4,44,563/- which includes 12% GST on the base profiteered amount of Rs. 3.96,931/-. ix. The Respondent vide their reply dated 24.07.2020 has claimed that they have passed on substantial amount of Rs. 58,65,423/- as the benefit of GST Input Tax Credit to the 117 customers in accordance with the requirements of Section 171 of CGST Act, 2017 to customers. A summary of category-wise profiteering the benefit passed on is furnished in the Table-'D' below: Table-`D' (Amount In Rs} S.No. Category of Customers No. of Units Area (in Sqft) Amount Raised Post GST (July, 2017 to September 2019) Profiteering Amt. as per DGAP Respondent claimed that the benefit already passed on Difference (Benefit to be passed on) Remark A B C D E F G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 54.20,860/- has already been passed on by the Respondent. The benefit of ITC passed on by the Respondent has been duly verified with the copies of Credit Vouchers, Sample Ledgers, Communication letters to the customers (sample basis), List of Customers and Acknowledgements (sample basis). xi. On being asked to confirm the receiving of the benefit of ITC, the Applicant vide email dated 25.09.2020 informed that he has received an amount of Rs. 60,305/- from the Respondent. Further, the Respondent vide email dated 13 11.2020 provided the email IDs of 84 customers including the Applicant. The DGAP sent Email to all 83 customers for confirmation of whether ITC benefit has been passed on to them. Responses from I0 customers have been received till date, all of whom have confirmed the receipt of benefit of ITC and no denials have been received so Far. k) the above computation of profiteering was with respect to 97 customers from whom payments had been received by the Respondent during the period 01.07;2017 to 30.092019, whereas the Respondent have booked a total number or 117 flats till 30.09.2019. Out of remaining 20 (16+4) units, 16 units were hooked after receipt of OC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 05.01.2021 and as conveyed vide letter dated 05.01.2021. The Respondent vide E-mail dated 02.02.2021 submitted that an amount of Rs. 58,65,423/- instead of 4, 44,563/- as was calculated by themselves finally as profiteering, had been paid by them to their customers. However, the Applicant No. 1 did not submit any submissions against the DGAP's report. 4. Copy of the above submissions dated 02.02.2021 of the Respondent was supplied to the Applicant No. 1 and to the DGAP to file their reply and clarifications respectively. However, the Applicant No. 1 has not submitted any written submissions in respect or the above submissions of the Respondent. The DGAP tiled his supplementary/verification report dated 10.03.2021 and has inter-alia stated that :- i. the Respondent was requested to provide the details of benefit passed on to the home buyer along with necessary documents like Credit Notes, Account Ledgers of the home buyers and also provide the email id's and phone numbers oldie home buyers. ii. the Respondent has claimed to passed on the ITC benefit to the home buyers us tabulated below:- S.No. Description Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, these units were excluded from the computation or profiteering and accordingly the notice was not required to pass on the benefit of ITC in terms of Section 171 of the CGST Act, 2017. 6. The proceedings in the matter could not be completed by the Authority due to Lack of required quorum or Members in the Authority during the period 29.04.2021 till 23.02.2022 and the minimum quorum was restored only w.e.f. 23.02.2022. The matter was taken up for further proceedings vide Order dated 23.03.2022. 7. Hearing in the matter was held on 05.04.2022. It was attended by Shri Archit Agarwal, Chartered Accountant and Ms Surekha Mahadik, AGM, M/s. Wadhwa Realty Pvt. Ltd. for the Respondent. Applicant No. 1 did not appear for the hearing. During the personal hearing the Respondent has re-iterated that they had produced their documents and records as and when required by the office of DGAP. The Respondent has accepted liability in respect of 'Tower F' of Anmol Fortune . 8.1 his Authority has carefully considered the Reports of the DGAP, submissions made by the Respondent and the case record. It is on record that Applicant No. 1 had filed a complaint alleging that the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the benefit already passed on is enclosed with this order as Annexure-A. 10. In view of the above discussions, the Authority concur with the DGAP report dated 31.12.2020. The Authority determines that the Respondent have profiteered by an amount of Rs. 4,44,563/- for the project 'Tower F' in the project Anmol Fortune-II during the period of investigation i.e, 01.07.2017 to 30.09.2019. The Authority has also taken note of DGAP verification report dated 10.03.2021 regarding claim of the Respondent that they have passed on Rs. 58,65,423/-. As per the said report, only 23 home buyers out of 117 home buyers have confirmed receipt of the ITC benefit and 2 home buyers have denied receipt of any benefit from the Respondent, the remaining home buyers did not respond to the communication made by the DGAP. Thus, evidence in respect of only 23 out of 117 customers has been submitted. Hence, such verification is neither definite nor conclusive. The claim of their refund along with the interest @18% thereon, from the date when the above determined profiteered amount was profiteered by him till the date of such payment, in line with the provisions of Rule 133 (3) (b) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) including those prescribed under Rule 133 (1) of the CGST Rules, 2017, as is clear from the said Order which states as follows:- A period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. Further, the Hon'ble Supreme Court, vide its subsequent Order dated 10.01.2022 has extended the period(s) of limitation till 28.02.2022 and the relevant portion of the said Order is as follows:- The Order dated 23.03.2020 is restored and in continuation of the subsequent Orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general of special laws in respect of all judicial or Quasi-judicial proceedings. According this Order having been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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