9911796707
TMI Blog2023 (8) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... r been placed before the DGAP during the course of the investigation for verification of authenticity and hence the same have not been incorporated in the computation of profiteered amount. The Authority further finds that the ITC of VAT, as much as is allowed vide the said VAT Assessment Orders for the period from April 2016 to June 2017 shall be incorporated into the computation of profiteered amount by the DGAP subject to verification of the authenticity of the same. The Authority, therefore, directs the DGAP to ascertain the authenticity of the VAT Assessment Orders submitted by the Respondent for the period from April 2016 to June 2017 and if verified by the State GST Commissioner/Uttar Pradesh VAT Department, the DGAP shall incorporate the amounts, as allowed by the concerned statutory Authority on assessment, in the computation of profiteered amount by including the same as ITC in the pre-GST period and recalculate the profiteered amount and submit his Report to this Authority. ii. The Respondent vide his submissions dated 10.09.2020 and 18.05.2022 has argued that the DGAP has taken an arbitrary figure of ITC of GST Rs. 3,44,11,808/- instead of Rs. 59,31,808/- in the post- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DGAP and it was reported as below: - a) That the Respondent was paying GST @ 12% in respect of the instant project as it was a commercial project. b) That the Respondent had submitted the reconciliation of turnover in his statutory ST-3 and GST Returns with the live unit-buyers of the two projects and also the bifurcation of Input Tax Credit as required by the DGAP. c) That the Respondent had also submitted the following documents/information to the DGAP vide his above-mentioned letters/e-mails during the course of the investigation:- i. Copies of GSTR-1 Returns for the period July, 2017 to November, 2019. ii. Copies of GSTR-3B Returns for the period July, 2017 to November, 2019. iii. Copies of Tran-1 Return for transitional credit availed by the Respondent. iv. Copies of VAT & ST-3 Returns for the period April, 2016 to June, 2017. v. Electronic Credit Ledger for the period July, 2017 to November, 2019. vi. CENVAT/ITC Register for the period 01.04.2017 to 30.11.2019. vii. List of buyers in the project "Anandam Square". viii. Reconciliation of turnover reported in GST Returns and list of buyers for the period July 2017 to November, 2019. ix. Copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds 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 is earlier". In the light of these provisions, the DGAP has contended that the ITC of the units which were under construction but not sold was provisional ITC that may be required to be reversed by the Respondent, if such units would remain unsold at the time of issue of Completion Certificate (CC), in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017 which read as under:- "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. 17 (3) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Available * (C)=(A) 8,72,620 - 4. Input Tax Credit of GST Availed (D) - 3,44,11,808 5. Total Turnover from Commercial Area (E) 2,87,081 9,03,06,132 6. Total Saleable Commercial Area in sq. (F) 52,976 52,976 7. Sold Area Relevant to Turnover in sq.ft. (G) 382 31,384 8. ITC proportionate to Sold Area (H) 6,292.30 2,03,86,216 9. Ratio of CENVAT/VAT/Input Tax Credit to Turnover (I) 2.19% 22.57% k) From the above Table-A' the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April 2016 to June 2017) was 2.19% and during the post-GST period (July 2017 to November 2019), it was 22.57% which clearly confirmed that post-GST, the Respondent has been benefited from additional ITC to the tune of 20.38% [22.57% (-) 2.19%] of the turnover. I) The profiteering has been computed by comparing the applicable tax rate and input tax credit available in the pre-GST period (April, 2016 to June, 2017) when Service Tax @4.50% was payable with the post-GST period (July, 2017 to November, 2019) when the effective GST rate was 12% (GST @18% along with 1/3rd abatement for land value) on construction service, vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 1,84,06,868/-. The unit-wise break-up of this amount has been given in Annexure-9 of the DGAP's Report. It was also observed that the Respondent had supplied the construction service in the State of Uttar Pradesh only. o) In the instant investigation, he had computed the profiteering covering the period from 01.07.2017 to 30.11.2019 and profiteering, if any, for the period post-November, 2019, had not been examined as the exact quantum of ITC that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed. 3. The NAA after considering the various submissions made by the Respondent, vide its Interim Order No. 15/2022 dated 31.08.2022, referred the matter back to the DGAP to carry out further verification/rectification and to recalculate the profiteered amount as per the provision of Rule 133 (2A) of CGST 2017. Accordingly, the DGAP has carried out necessary re-verification and re-calculation and on conclusion of the same, a report dated 12.10.2022 was sent to the NAA under Rule 133 (2A) of the CGST Rules, 2017 which inter-alia stated : - i. That after receiving reference fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F*C 11,982 35,14,117 9. Ratio of CENVAT/VAT/Input Tax Credit to Turnover (I)=H/E 4.17% 3.89% iii. Therefore, from the above-revised Table 'A', it was clear that the ITC as a percentage of the turnover that was available to the Respondent for his project "Anandam Square" during the per-GST period (April, 2016 to June, 2017) was 4.14% and for the post-GST period (July, 2017 to November, 2019), it was 3.89%. It clearly confirmed that post-GST, the Respondent had not benefited from additional Input Tax Credit in respect of the project "Anandam Square". iv. The DGAP has concluded that no benefit of additional input tax credit has accrued to the Respondent in respect of the project "Anandam Square". Section 171 of the Central Goods and Services Tax Act, 2017 has not been contravened by the Respondent, in as much as no benefit of additional input tax credit has accrued to the Respondent on the demand raised by the Respondent during the post-GST period from 01.07.2017 to 30.11.2019 in respect of "Anandam Square". v. The present investigation covers the period from 01.07.2017 to 30.11.2019. 5. This Commission has carefully considered the DGAP's Report dated 12.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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