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TMI Blog2022 (9) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price. 2. The DGAP in his Report dated 29.01.2021, inter-alia stated that: i. The Maharashtra State Screening Committee on Anti-profiteering examined the said application and forwarded the said application with his recommendation, to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the Rules. ii. The aforesaid reference was examined by the Standing Committee on Anti-profiteering in his meeting held on 13.09.2019 and vide minutes of meeting received by the DGAP on 09.10.2019, it was decided to forward the same to the DGAP, to conduct a detailed investigation in the matter. iii. On receipt of the reference from the Standing Committee, a notice under Rule 129 of the CGST Rules, 2017 was issued by the DGAP an 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 the Applicant No. 1 by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all the suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso submitted the required details vide e-mail dated 03.12.2020 and 07.12.2020. ix. Vide e-mail dated 12.01.2021, the Applicant No. 1 was given an opportunity to inspect the non-confidential evidences/reply furnished by the Respondent, on 15.01.2021 or 18.01.2010. The Applicant No. 1 replied vide e-mail dated 12.01.2021 and informed that he was staying abroad and requested to share the non-confidential documents submitted by the Respondent on e-mail or WhatsApp. Since, the Respondent had declared all the documents as confidential, an e-mail was sent to the Respondent on 12.01.2021 to provide the summary of confidential and non-confidential documents. However, the Respondent failed to submit the summary of confidential and non-confidential documents, and declared all the documents as confidential and thus the same were not shared with the Applicant No. 1. x. The period covered by the current investigation was from 01.07.2017 to 31.03.2019. (Restricted to 31.03.2019, as the Respondent opted for new scheme in terms of Notification No 03/2019 (Central Rate) dated 29.03.2019). xi. The time limit to complete the investigation was upto 08.04.2020. However, due to prevalent pandemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till then and same was accepted at time of RERA Registration 21/07/2018 to 28/03/2019 Kotak Mahindra Bank 8612417049 Opened separate account after necessary clarifications 29/03/1019 to till date HDFC Bank 50200026330972 Opened new accounts as project was mortgaged Project Name:- Garden Avenue K-4 31/07/2017 To 20/07/2018 (Note : RERA was applicable from 01/08/2017) HDFC Bank 50200026330972 Erroneously kept common account for Garden Avenue K3 & K4 as there was no clarity regarding accounts till then and same was accepted at time of RERA Registration 21/07/2018 to 28/03/2019 HDFC Bank 50200026330972 Opened account with Kotak Mahindra Bank as above for K3 and kept this account for K4 29/03/2019 to till date HDFC Bank 57500000324922 Opened new accounts as project was mortgaged c. Most of the work of the Project "Garden Avenue K-4" was completed before July, 2017 and hence no substantial cost incurred 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us replies of the Respondent and the documents/evidences on record had been carefully scrutinised. The main issues for determination were: a. Whether there was benefit of reduction in the rate of tax or ITC on the supply of construction service by the Noticee, on implementation of GST w.e.f. 01.07.2017 and if so, b. Whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the CGST Act, 2017. xvi. Another relevant point in this regard was 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 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 reads 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 completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier." Thus, the ITC pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible under the said notification. xviii. Further, the contention of the Respondent that the Applicant No 1 belongs to the project '`Garden Avenue K-et" which was registered under the separate RERA registration no. P99000004018 appeared to be correct and it had been verified from the documents submitted by the Respondent that "Garden Avenue K-4" and "Garden Avenue K-3" had separated RERA registrations. As per Respondent submission, the Respondent maintained the separate bank accounts for both the Projects "Garden Avenue K-4" (RERA Reg. No. P99000004018) and "Garden Avenue- K-3") (RERA Reg. No. P99000007110) as per the provisions of RERA Act, 2016 21.07.2018 onwards. Since the Respondent had submitted that he were having separate RERA registrations and separate bank accounts for both the Projects, the DGAP restricted the investigation to the Project "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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om any additional ITC and in fact, the ITC availed by the Respondent post introduction of GST was lower by 0.40% [1.03% (-) 0.63%] of the turnover, compared to the pre-GST period. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9), 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". 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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