TMI Blog2022 (8) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. Hence, the Authority finds that this contention of the Respondent regarding exclusion of land value being untenable cannot be accepted. The Authority finds no reason to differ from the above detailed Computation of profiteering in the DGAP's Report or the methodology adopted. Hence, the Authority holds that, the as a percentage of the turnover that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 3.71 % and during the post-GST period (July-2017 to September-2019), it was 8.76% - the Authority determines the profiteered amount for the period from 01.07.2017 to 30.09.2019, in the instant case, as Rs.1,07,67,330/- for the project 'MJR Clique Hydra'. This profiteered amount of Rs. Rs.1,07,67,330/- includes GST on the base profiteered amount of Rs. 96,13,687/-homebuyer/customer recipient and unit No. wise break-up of this amount as given in Annexure-13 of the DGAP Report is accepted. This amount is inclusive of Rs.1,03,453/- (including GST on the base amount of Rs. 92,369/-) which is the profiteered amount in respect of the Applicant No. 1, mentioned at serial No. 108 of Annexure-13 of the said Report. The Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and Sh. G. Pattabhi. Chartered Accountants, Authorised Representatives for the Respondent. ORDER l. The Report dated 01.06.2020, has been received on 02.06.2020 from Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after a detailed investigation under Rule 129 (6) of the Central Goods Service Tax (CGST) Rules, 2017. 2. The brief facts of the case and findings of investigation conducted by the DGAP are as under:- i. An application was received on 09.10.2019 from the Standing Committee on Anti-profiteering under Rule 129 of the CGST Rules, 2017 to conduct a detailed investigation in respect of an application dated 25.07.2019, filed by the Applicant No. 1 under Rule 128 of the Rules, alleging profiteering in respect of construction service supplied by the Respondent. The Applicant No. 1 had submitted that she had booked a Flat No. C-701 in the Respondent's project MJR Clique Hydra Electronic City Phase-I. Bengaluru and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to her by way of commensurate reduction in price. The DGAP has intimated that the Applicant No. 1 had lodged the complaint with the Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by the Applicant No. 1 during the period 30.10.2019 to 31.10.2019 which was not availed by the Respondent. The DGAP has stated that the time limit to complete the investigation was extended up to 07.07.2020 from 08.04.2020 by this Authority, in terms of Rule 129 (6) of the CGST Rules, 2017. DGAP has also informed that the period covered by the current investigation was from 01.07.2017 to 30.09.2019. vi. The Respondent, in response to the above Notice dated 23.10.2019 and subsequent reminders dated 06.11.2019, 22.11.2019, 15.01.2020, 13.02.2020 and 08.05.2020, had submitted the following documents/information vide his letters/e-mails dated 02.12.2019, 05.12.2019, 16.01.2020, 14.02.2019, 26.02.2019, 16.05.2020 and 23.05.2020:- (a) Copies of GSTR-1 returns for the period July, 2017 to September, 2019. (b) Copies of GSTR-3B returns for the period July, 2017 to September, 2019. (e) Copies of Tran-1 filed. (d) Electronic Credit Ledger for the period July, 2017 to September, 2019. (e) Copies of VAT ST-3 returns for the period April, 2016 to June, 2017. (f) Copies of all demand letters, sale agreement/contract issued in the name of the Applicants. (g) D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT @ 14.5% - CGST @ 9% 254359 service Tax @ 12.36% - SGST 9% 123897 Total (A) 46,99,856 S.No. PAYMENT SCHEDULE 1 On Booking 300000 2 On Agreement (Less Booking Amount) 20% 639971 3 On Completion of Foundation 10% 469986 4 On Completion of Ground Floor Slab 4% 187994 5 On Completion of First Slab Floor 4% 187994 6 On Completion of second Slab Floor 4% 187994 7 On Completion of Third Slab Floor 4% 187994 8 On Completion of Fourth Slab Floor 4% 187994 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II of the CGST Act, 2017 (Activities or Transactions which should 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, sale of building . Further, clause (b) of Paragraph 5 of Schedule II of the CGST Act, 2017 read as (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 the Completion certificate, where required, by the competent authority or after its first occupation. whichever was earlier . Thus, the ITC pertaining to the residential units which were under construction but not sold was provisional ITC which might be required to be reversed by the Respondent, if such units remained unsold at the time of issue of the Completion Certificate (CC), in terms of Section 17(2) Section 17(3) of the CGST Act, 2017. Therefore, the ITC pertaining to the unsold units might not fall within the ambit of this investigation. and the Respondent was required to recalibrate the selling prices of such units to be sold to the prosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts (B) 1,07,27,831 3 Total CENVAT/VAT/Input Tax Credit Available (C=A +B) 1,77,87,653 4 Input Tax Credit of GST Availed (D) 3,81,52,051 5 Total Turnover from Residential Area (E) 24,55,62,128 27,98,05,928 6 Total Saleable Area (F) 3,45,690 3,45,690 7 Sold Area relevant to Turnover in sq. Ft. (G) 1,77,000 2,22,040 8 ITC proportionate to Sold Area (H=(C or D)* G/F) 91,07,624 2,45,05,428 9 Ratio of Cenvat/Input Tax Credit to Turnover (I=H/E*100) 3.71% 8.76% xiii. The DGAP has claimed from the above Table- B that the input tax credit as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 3.71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Net Basic Demand during, 2017 to September, 2019 G 19,03,70,048.00 9 GST @12% H=G*12% 2,28,44,405.76 10 Total demand I=G+H 2,32,44,14,453.76 11 Recalibrated Basic Price J=G*(1-D) or 94.95% of G 18,07,56,360.58 12 GST @ 12% K=J*12% 2,16,90,763.27 13 Commensurate demand price L=J+K 20,24,47,123.85 14 Excess Collection of Demand or Profiteered Amount L=I-L 1,07,67,329.91 xv. DGAP has claimed from Table-'C' above that the additional input tax credit of 5.05% of the turnover should have resulted in commensurate reduction in the basic prices as well as cum-tax prices. Therefore. in terms of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roportionate ITC in respect of such units. (i.e. 151 Units booked pre GST (A) + 51 Units booked post GST(B)=202; Of(A), demands not raised on 12 between 01.07.2017 to 30.09.2019 Of(B), 21 Units booked after 17.12.2018 (after CC) Hence, (151-12)+(51-12)=169 Units demands considered) 3. Consequently, the DGAP has concluded that post-GST, the benefit of additional ITC of 5.05% of the turnover had accrued to the Respondent for the project MJR Clique Hydra . This benefit was required to be passed on to the recipients but this was not done. Therefore, Section 171 of the CGST Act, 2017 has been contravened by the Respondent, inasmuch as the additional benefit of ITC @ 5.05% of the base prices received by the Respondent during the period 01.07.2017 to 30.09.2019, has not been passed on by the Respondent to 190 recipients including the Applicant No. 1. These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with Unit Nos. allotted to such recipients. Therefore, the total additional amount of Rs.1,07,67330 /- (Rupees One Crore Seven Lakh Sixty Seven Thousand Three Hundred and Thirty only) was required to be retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion certificate was obtained on 17.12.2018. The total area of construction was 3,45,690 Sq. Ft. which could be segregated as follows:- Sl. No. Description Area 1. Booked prior to 1st July 2017 1,79,890 2. Booked after 1st July 2017 before 17th December 2018 30,770 3. Booked after 17th December 2018 24,070 4. Remained unsold as on September 2019 1,10,960 5. Total 3,45,690 ii. The VAT Input Tax Credit and CENVAT Credit for the period 2016-17 and April 2017 to June 2017 was Rs.1,77,87,653/-. iii. amount of Input Tax Credit of GST availed during the period post GST was Rs.3,81,52,051/-. This credit included Rs.35,26,800/- of ITC relating to unregistered supplies paid under RCM which was not liable to be paid pre-GST. iv. As far as the benefit of input tax Credit was concerned, the basic prices post-GST got increased and were not decreased after int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if there was reduction in output tax on one hand and also if there was benefit of input tax credit accruing to the supplier. In this regard, the Respondent has submitted that the term 'benefit' was employed in the Statute with a purpose of any extra benefit without paying extra for it. He has further argued that, the benefit has to be understood in the context of profiteering. The meaning of the term 'profiteering' was explained in different dictionaries as follows:- Black's Law Dictionary - taking advantage of unusual or exceptional circumstances to make excessive profits; Law Lexicon - To Seek or obtain excessive profits, one who was given to make excessive profits: Shorter Oxford Dictionary - Make or seek to make an excessive profit; To seek or obtain excessive profits especially illegally x. Whereas the Report or DGAP did not bring out any of these factors, to establish that there was a benefit, which was accrued which otherwise would have not accrued to the Respondent. The Respondent has also submitted that the DGAP has made certain assumptions and presumptions to determine the profiteering, if any, whereas as per the methodology and underst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on revenue. Therefore, the methodology adopted was not appropriate; d) Further also, in Certain period where the wages or labour costs were involved, which might not have more credit. Whereas if there was material cost. there would be more credits; e) The pre-GST revenue included more or land cost and lesser towards construction cost, whereas post GST revenue included more of construction cost than land cost, thereby there would be complete distortion in ITC percentage; f) The comparison of ITC of same expenditures has to be considered and cannot be compared to different types of expenditures incurred pre-GST and post-GST. g) The increase in input credit would be due to increase in the tax rate paid on the goods and services received. Earlier, Service Tax was 15% whereas GST was 18%. If it was works contract, GST was 18% whereas including VAT and Service Tax it was around 14 to 15%. Therefore increase in credit was also due to increase in tax rate and it could not be considered to be any benefit. h) The additional credit available of the taxes extra paid could not be considered to be benefit of input tax. In other words, if there was no reduction in basic price com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided in list of home buyers' list submitted which was taken cognizance at para 11 (k) of the Report. d. Further the computation has taken the Value of revenue received only and not revenue accrued, yet to be received. Since the project was completed in December 2018 the value of amount accrued, yet to be received also should have been added to revenue. The value in Sl. No. 5 of Table B column post-GST would be Rs.29,88,87,857/- instead of Rs.27,98,05,928/-. e. Further, the computation or amount was also made only relating to Construction. There were other taxable amounts received by him in post-GST period, which should be added for the post GST taxable turnover. f. By giving effect to the above points other than point e above the pre-GST credit percentage would be 3.77% and post-GST credit would be 7.78% and the difference in credit rate would be 4.01 % as against the 5.05% determined in the above table. xiii. The allegations/findings in para 20 of the DGAP's Report were not correct as the methodology adopted itself was not correct. If assumed the methodology was correct then the revised percentage should have been at 4.01% and not 5.05% as per the revised com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regime i.e., prior to 01.07.2017 was 1,77,000 sq. ft. only. b) If the Respondent had received supplies from the unregistered suppliers and paid GST under RCM, the Respondent had become eligible to avail ITC of the same which was not available to the Respondent in pre-GST regime which has accrued more benefit of ITC to the Respondent. In pre-GST regime, even if the Respondent was receiving supplies from unregistered suppliers, there was no ITC benefit available to the Respondent. c) In the erstwhile pre-GST regime, various taxes and cesses were being levied by the Central Government and the State Governments, which got subsumed in the GST. Out of these taxes. the ITC of some taxes was not being allowed in the erstwhile tax regime. For example, the ITC of Central Sales Tax, which was being collected and appropriated by the States, was not admissible. Similarly, in case of Construction Service, while the ITC of Service Tax was available, the ITC of Central Excise Duty paid on inputs was not available to the service provider. Such input taxes, the credit of which was not allowed in the erstwhile tax regime, used to get embedded in the cost of the goods or services supplied. resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ITC were defined under Section 2(62) and 2(63) respectively in the CGST Act, 2017. However, the additional ITC was the amount of ITC which was available to the Respondent in GST regime in addition to the ITC which was available to him in pre-GST regime. This was because in the erstwhile pre-GST regime, various taxes and cesses were being levied by the Central Government and the State Governments, which got subsumed in the GST. Out of these taxes. the ITC of some taxes was not being allowed in the erstwhile tax regime. With the introduction of GST with effect from 01.07.2017, all these taxes got subsumed in the GST and the ITC of GST became available in respect of all goods and services, unless specifically denied. g) Section 171(1) reads as Any reduction in rate of tax on any supply of goods or Services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices. It was abundantly clear that the legal requirement was that in the event of a benefit of ITC or reduction in rate of tax, this benefit must be passed on to the recipients by way of commensurate reduction in prices of the goods or services. In the present case, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of ITC to the recipients by reducing the prices commensurately. Both the above benefits have been granted by the Central as well as the State Governments by sacrificing their tax revenue in the public interest and hence the suppliers were not required to pay even a single penny from their own pocket and hence, they have to pass on the above benefits as per the provisions of Section 171 (1) of the CGST Act, 2017. Section 171 (1) reads as Any reduction in rare of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices. It was abundantly clear that the legal requirement was that in the event of a benefit of ITC or reduction in rate of tax, there must be a commensurate reduction in prices of the goods or services. In the present case, there was additional benefit of ITC which has accrued to the Respondent after implementation of GST. In the present case, profiteering has been arrived at by comparing the ITC available to the Respondent in pre and post-GST era. Before the GST was introduced, the Respondent was availing CENVAT credit of Service Tax paid on input services and VAT paid on inputs but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 171. The DGAP has further argued that the illustrations given by the Respondent were purely based on the assumption which has got nothing to do with the filets of the case. The additional benefit of the ITC accrued to the Respondent was determined only on the basis of the facts of the present case. The DGAP has also mentioned that the additional benefit the ITC accrued at any given point of time was associated with the whole project whereas the benefit of ITC required to be passed on in terms of Section 171 would be computed proportionate with the area sold and the actual amount to be passed on to each home buyer can only be determined by factoring the demand raised from the home buyers or advance received from them. Thus, the turnover considered for the computation of the profiteering pertaineds to the sold units only in the project. Whereas, as stated above, the total ITC availed pertained to the entire project of the Respondent. Therefore, to determine the actual ITC attributable to the sold units. the proportionate turnover was considered. m) The turnover or collection was based on milestones and even the buyers paid belatedly even after completion of the milestone, a reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment exchequer. But this amount of tax was being paid by the Respondent by utilizing the ITC and not in the form of cash. Hence, the amount collected from the customers in the form or cash in lieu of GST was being retained by the Respondent. The has also stated that the ITC being utilized by the Respondent for the payment of GST to the Government exchequer was the ITC which was not available to him in pre-GST regime. Hence the Respondent has benefitted with this additional ITC in post-GST regime which was required to be passed on to the recipients/customers in terms of Section 171 (I) of the CGST Act. 2017. Moreover, any increase in tax component was charged to and collected from customers, whereas any increase in the quantum of ITC might be pocketed. p) Under the provisions of Section 13 of the CGST Act. 2017 lead with Section 15(1) and 31(2) of the CGST Act, 2017, the demand raised has been considered as the value of taxable supply of service in the present case. Therefore, as per the home buyers list furnished by the Respondent, the actual amount raised in post-GST regime was Rs. 27,98,05,928/- only. The DGAP has also submitted that the amount raised by the Respondent from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the subsequent period to that extent. t) Though the Respondent received the completion certificate for the present project on 17.12.2018, but the Respondent was raising demands from the home buyers even after receipt of the Completion certificate. Therefore, vide Para 26 of the Report dated 01.06.2020 the DGAP has submitted that any amounts which were to be received after September. 2019 i.e. from October, 2019 onwards, had not been considered as the investigation period covered under the above Report was from 01.07.2017 to 30.09.2019 only. The DGAP has also stated that the additional benefit accrued to the Respondent has been clearly outlined in the Report dated 01.06.2020. u) Vide his supplementary reports dated 01.12.2020 and 27.05.2022 the DGAP has additionally submitted that the ITC' as defined under Section 2(63) of the CGST Act, 2017, meant the credit of input tax, Hence, ITC was clearly based on the input tax i.e., the tax paid by the Respondent on the supplies or goods and services received by the Respondent. If Respondent paid more input tax. more ITC would be available to the Respondent and vice-versa. The Respondent has entirely misinterpreted the conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.15% Total 16.15% Post-GST Tax Rate Abatement Net Effective Rate Central GST 9% 33.33% 6% State GST 9% 33.33% 6% Total 12% x) As per the statutory returns filed by the Respondent in pre and post GST periods, the payment of taxes made by the Respondent in pre and post GST periods was as under:- i. Pre-GST:- As per the Service Tax returns filed by the Respondent for the period 01.04.2016 to 30.06.2017, the total Service Tax payable was Rs. 5.85 Cr., out of which the Respondent paid Service Tax of Rs. 2.20 Cr. through cash which was 38% (approx.) or the total ST payable whereas the Respondent paid ST of Rs. 2.69 Cr. through CENVAT Credit which was 46% (approx.) of the total ST payable. ii. Post-GST:- As per the GSTR-3B filed by the Respondent for the period 01.07.2017 to 30.09.2019, the total GST pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the Government, irrespective of whether the supplies in respect of which such amount was collected were taxable or not. The DGAP has further stated that, in terms of Section 76(10), if any surplus amount of tax was left after the adjustment under sub-section (9). that amount would either be credited to the Fund or refunded to the person who has borne the incidence of such amount. Hence, the provisions of Section 76(10) were applicable with the provisions or sub-section (9) of the Section 76 of the CGST Act, 2017 only which were not applicable in the present case. 6. The Authority has carefully considered the Reports of the DGAP, submissions made by the Respondent including during the personal hearing and the case record and the Authority observe that the Respondent is in the real-estate business and has been developing his project MJR Clique Hydra in Bengaluru. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent has not passed on the benefit of ITC to her by way of a commensurate reduction in the price of the flat purchased by her (Applicant No. 1) from the Respondent. We find that the DGAP, after a detailed investigation, has found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which provides that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way or commensurate reduction in prices. (c) It is apparent from the plain reading of the above provision that it mentions reduction in the rate of tax or benefit of ITC which means that if any reduction in the rate of tax is ordered by the Central and the State Governments or a registered supplier avails benefit of additional ITC post GST implementation, the same have to be passed on by him to his recipients since both the above benefits are being given by the above Governments out of their scarce and precious tax revenue. It also provides that the above benefits arc to be passed on any supply i.e. on each product or unit of construction or service to every buyer and in case they are not passed on, the quantum of denial these benefits or the profiteered amount has to be computed for which investigation has to be conducted in respect of all such products/units/services by the DGAP. What would be the 'profiteered amount' has been clearly defined in the explanation attached to Section 171. (d) These benefits c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Procedure and Methodology which has been done by it vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017. However, no fixed mathematical formula, in respect of all the Sectors or the products or the services, can be set passing on the above benefits or for computation of the profiteered amount, as the facts of each case are different. (k) In the case of one real estate project, date of Start and completion of the project, price of the flat/shop, mode of payment of price or instalments, Stage of completion of the project. rates of taxes pre and post GST implementation, amount of CENVAT credit and ITC available, total saleable area, area sold and the taxable turnover received before and after the GST implementation would always be different from the other project and hence the amount of benefit of additional ITC to be passed on in respect of one project would not be similar to the other project. Therefore, no set procedure or mathematical methodology can be framed for determining the benefit of additional ITC which has to be passed on to the buyers of the units. (l) Moreover, this Authority under Rule 126 has been empowered to 'determine' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax reduction and ITC which are the sacrifices of precious tax revenue made from the kitty of the Central and the State Governments are passed on to the end consumers who bear the burden of tax. (b) The intent of this provision is the welfare of the Consumers who are voiceless, unorganised and vulnerable. This Authority is charged with the responsibility of ensuring that the both the above benefits are passed on to the general public as per the provisions of Section 171 read with Rule 127 and 133 of the CGST Rules, 2017. Hence, the anti-profiteering related Rules and Section 171 of the Act have express approval of the Parliament, all the State Legislatures, the Central and all the State Governments and the GST Council and therefore, Section 171 and the Rules are constitutional and are not violative of Article 14 and 19 (1) (g) of the Constitution. This Authority has nowhere interfered with the business decisions of the Respondent. (c) The Respondent has also contended that Profiteering has not been defined in the CGST Act or the Rules therefore, he has cited the definitions of Profiteer/Profiteering from Black's Law Dictionary. Law Lexicon and Shorter Oxford Dictionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recovers from buyers through invoices on monthly basis. As Such, the contention of the Respondent is untenable and hence rejected. 12. The Respondent has argued that the increase in input credit was due to increase in the tax rate paid on the goods and services received. Earlier, Service Tax was 15% whereas GST is 18%. The rate of GST on Works Contract is 18% whereas earlier VAT and Service Tax Was around 14 to 15%. Therefore, increase in credit was also due to increase in tax rate and it could not be considered to be any benefit. The Authority finds no merit in this argument. The Respondent has not been compelled to pay more GST on services of 18% when Service Tax in the pre-GST period was 15%, as not even a single rupee of tax was being paid in the pre-GST regime or in the post-GST regime by him from his own pocket, as he period and was embedding those taxes on which ITC was not available like the Central Excise Duty in his cost of the flat and realizing it from his customers. The is also, now, getting full ITC of all the taxes paid by him on his purchase of goods and services in the post GST period and is also Charging GST from his buyers. 13. The Respondent has conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al basis not on accrual basis since profiteering has to be calculated on the basis of money actually received by the Respondent. Hence, the above plea of the Respondent is not maintainable. 16. The Respondent has referred to Table-C of the DGAP's Report and submitted that the amount at Sl. No. 6 included the value which was pre-GST, post-GST and also post obtaining completion certificate. The has also stated that Sl. No. 7 has only reduced the flats which were booked after completion certificate. It is the Respondent's claim that, the flats booked post-GST were not affected by anti-profiteering provision since the price would be based on market consideration prevailing during that point of time and also taking into consideration the revised costs of the project net of GST credits. This Authority has considered this submission and finds no merit in it. This Authority finds that, the amount pertaining to the flats booked post GST prior to obtaining completion certificate, were required to be considered as such home buyers were also eligible to get their due benefit of the ITC the Respondent. The amount at Sl. No. 6 of the Table-C of the DGAP s Report was amount ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have issued separate invoice demanding the cost of land, the amount of GST charged would have been 18% and not 12%. The Authority finds that, had the Respondent excluded the land value from the demand raised to his buyers, the value of land would have been excluded from the preview of profiteering. Therefore, the Authority finds that the facts or the cases relied upon by the Respondent are different from the present case. Hence. the Authority finds that this contention of the Respondent regarding exclusion of land value being untenable cannot be accepted. 19. Hence, as per our findings above, the Authority finds no reason to differ from the above detailed Computation of profiteering in the DGAP's Report or the methodology adopted. Hence, the Authority holds that, the as a percentage of the turnover that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 3.71 % and during the post-GST period (July-2017 to September-2019), it was 8.76%. This confirms that. post-GST, the Respondent has been benefited from additional ITC to the tune 5.05% (8.76%-3.71%) of his turnover and the same was required to be passed on to the customers/flat buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of Rule 133 (3) (b) of the CGST Rules 2017. 24. A Complete list of eligible customers/ flat buyers/ recipients in respect of the project MJR Clique Hydra of the Respondent with the details of amount of benefit of ITC to be passed on to each of them (along with interest @ 18% as prescribed), is attached with this order as Annexure-A. 25. The Authority also order that the profiteered amount of Rs. Rs.1,07,67,330/- for the project MJR Clique Hydra , along with the interest @ from the date of receiving of the profiteered amount from the customers/ flat buyers/ recipients till the date of passing the benefit of ITC, Shall be paid/passed on by the Respondent within a period of 3 months from the date of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017. 26. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to the customers/ flat buyers/ recipients in his project MJR Clique Hydra in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. However, perusal of the provisions of Section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order along with interest @18% as prescribed. In this regard an advertisement of appropriate size (large enough to be noticed by the reader) may also be published in minimum of two local Newspapers/vernacular press in Hindi./English/local language with the details i.e. Name of builder (Respondent) M/s MJR Builders Pvt. Ltd., Project- MJR Clique Hydra , Location- Bengaluru, Karnataka and profiteered amount of Rs. Rs.1,07,67,330/- so that the concerned customers/ flat buyers/ recipients can claim the benefit of ITC if not passed on. Customers/ flat buyers/ recipients may also be informed that the detailed NAA Order is available on Authority'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. 29. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this order to the Authority and the DGAP within a period of 4 months from the date of this Order. 30. The DGAP is also directed to monitor the compliance of the order by the concerned jurisdictional CGST/SGST Commissioner. 31. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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