TMI Blog2022 (9) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... during the post-GST period (July-2017 to March-2019), it was 0.63%. On this basis, the DGAP has concluded his Report with the findings that the Respondent had neither been benefited from additional If nor there had been a reduction in the tax rate in the post-GST period for the Project Garden Avenue K-4 . The Authority has no reason to differ from the Report of DGAP and we therefore agree with his findings since there was no reduction in the rate of tax nor there was increased additional benefit on account of ETC. Hence, the provisions of Section 171 of CGST Act, 2017 are not liable to be invoked in this case. The Authority concludes that the instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the Respondent has neither been benefited from additional ITC nor has there been a reduction in the tax rate in the post-GST period. The application filed by the Applicant No. 1 requesting action against the Respondent for alleged violation of the provisions of the Section 171 of the CGST Act is not maintainable and hence the same is dismissed. - Case No. 66/2022 - - - Dated:- 31-8-2022 - SH. AMAND SHAH, TECHNICAL MEMBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, the Respondent did not submit the requisite documents on the due date. Hence, reminder letters were sent to the Respondent on 25.11.2019. 03.01.2020, 23.01.2020, 18.02.2020, and 26.02.2020. The Respondent did not submit all the requisite documents even after several reminders letters, therefore, summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules, was issued on 13.05.2020 to Sh. Purushottam Patel (Respondent/ Partner) to submit the relevant documents on or before 22.05.2020. v. In compliance to the said summons, the Respondent replied vide e-mail dated 27.05.2020 and requested for time to submitted the relevant documents. Therefore, 2nd summons under Section 70 of the Central Goods and Service Tax Act, 2017 read with Rule 132 of the Rules, was issued on 02.06.2020 to Sh, Purushottam Patel (Partner) to submit the relevant documents on or before 20.06.2020. vi. In compliance to 2nd summons, the Respondent did not submitted reply/ documents on due date. Hence, 3rd summons under Section 70 of the Central Goods and Service Tax Act, 2017 read with Rule 132 of the Rules, was issued on 02.07.2020 to Sh. Purushottam Patel (Partner) to submit the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed or notified under the CGST Act, 2017 which fell during the period from the 20th day of March, 2020 to the 29th day of June, 2020, and where completion or compliance of such action had not been made within such time, then, the time limit for completion or compliance of such action, should be extended upto the 30.06.2020. Vide Notification 55/2020-Central Tax dated 27.06.2020, Notification No. 65/2020 dated 01.09.2020, and Notification No. 91/2020 dated 14.12.2020, it was further extended upto 31.012021. xii. In response to the notice dated 23.10.2019, the Respondent replied vide letters/emails dated 13.01.2020, 28.01.2020, 01.02.2020, 26.02.2020, 06.03.2020, 27,05.2020, 13.07.2020, 20.07.2020, 30.09.2020, 01.10.2020, 03.12.2020, 07.12.2020, 05.01.2021, 12.01.2021/ 20.01.2021 and 25.01.2021. The replies of the Respondent are summed up as follows: - a. he was engaged in providing construction services and developing two projects at Virar West namely Garden Avenue K-4 (RERA Reg. No. P99000004018) and Garden Avenue K-3 (RERA Reg. No. P99000007110) and charging 1 % without ITC w.e.f. 01.04.2019 in terms of Notification No. 03/2019 (Central Rate) dated 29.03.2019). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards the Project after implementation of GST, on which he could get any major benefit of ITC to pass on to the buyers. The Respondent also submitted that he opted for composition scheme in VAT in the pre GST period and hence no ITC with regard to VAT had been availed by him. The Respondent further stated that he had availed ITC of Rs. 21,77,557/- (net of reversal of Rs. 39,75,528/- in terms of Notification No. 03/2019 (Central Rate) dated 29.03.2019) during the period 01.07.2017 to 31.03.2018 in respect of the project Garden Avenue K-4 and for the period 01.04.2018 to 31.03.2019, he had not availed any ITC in relation to the said project as the project was almost fully completed as on July, 2017 and thereafter no major cost incurred towards the Project. Further, w.e.f 01.04.2019, the Respondent opted new scheme as per the Notification No. 03/2019 (Central Rate) dated 29.03.2019) i.e. 1 % GST without ITC. However, the O.C. for the said project had not been received till date due to revised fire approvals after tragic fire incident in Kamla Mills, Mumbai. xiii, Vide the aforementioned letters/e-mails, the Respondent submitted the following documents/information: a. Brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucture 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. Thus, the ITC pertaining to the residential units and commercial shops which was 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, in terms of Section 17(2) Section 17(3) of the CGST Act, 2017, which read as under: Section 17 (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the 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 is 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 may be presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Garden Avenue K-4 only. The reasons for maintaining common bank accounts for both the projects till 20.07.2018 as mentioned in Para 13 (ii) above, were not the subject matter of the DGAP. xix. Based on the Respondent submissions/documents, it had been noticed that the Respondent had opted for the new scheme from 01.04.2019 In terms of Notification No. 03/2019-CT (Rate) dated 29,03.2019 and reversed the ITC of Rs. Rs. 39,75,528/- in the month of August, 2019 to fulfill the conditions prescribed in the Notification No. 03/2019-CT (Rate) dated 29.03.2019, Therefore, the period of investigation had been restricted to 01.07.2017 to 31.03.2019 instead of 01.07.2017 to 30.09.2019. xx. As regards the allegation of profiteering, it was observed that prior to 01.07.2017, i.e., before the GST was introduced, the Respondent were eligible to avail credit of Service Tax paid on input services only (no credit was available in respect of Central Excise duty paid on the Inputs) and also ITC of VAT paid on inputs was not available to the Respondent as he had opted for composition scheme in VAT in the pre-GST regime. Further, post-GST, the Respondent could avail ITC of GST paid on all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxi. There was no additional benefit of ITC, on implementation of GST w.e.f. 01.07.2017, the provisions of Section 171 of the CGST Act, 2017 was not attracted. 3. Therefore, the DGAP has concluded that:- i. The allegation was that post implementation of GST, the benefit of ITC was not passed on by the Respondent by way of commensurate reduction in the price, to the recipients. However, as discussed above, there was no benefit of additional ITC that accrued to the Respondent post introduction of GST. In fact, the ITC as a ratio of Respondent's turnover decreased from 1.03% to 0.63%. Section 171(1) of the CGST Act, 2017 dealing with profiteering could be invoked in the event there was a reduction in the rate of tax or there was an increase in the input tax credit. Since there was no additional benefit of ITC on implantation of GST w.e.f. 01.07.2017, the said statutory provision was not applicable to the present case for the project Garden Avenue K-4 . ii. In view of the aforementioned findings, the conclusion was that Section 171(1) of the CGST Act, 2017, requiring that a reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there had been a reduction in the tax rate in the post-GST period for the Project Garden Avenue K-4 . 8. The Authority also finds the Applicant No. I vide his above submissions has also stated that he has satisfied with the findings in the DGAP's Investigation Report dated 29.01.2021. 9. In view of our above facts the Authority has no reason to differ from the Report of DGAP and we therefore agree with his findings since there was no reduction in the rate of tax nor there was increased additional benefit on account of ETC. Hence, the provisions of Section 171 of CGST Act, 2017 are not liable to be invoked in this case. The Authority concludes that the instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the Respondent has neither been benefited from additional ITC nor has there been a reduction in the tax rate in the post-GST period. 10. In view of the above, the allegation that the Respondent has not passed on the benefit of ITC in this case is not sustainable. Accordingly, the application filed by the Applicant No. 1 requesting action against the Respondent for alleged violation of the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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