9911796707
TMI Blog2023 (9) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of Section 171 of the CGST Act, 2017 and submit the complete investigation report for all the Projects under this single GST Registration." 2. The brief facts of the case have been mentioned in the NAA's I.O. No. 12/2019 dated 15.10.2019 and the same are reproduced below: i. A Report dated 07.03.2019, was received on 14.03.2019 from the 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. In the present case the Karnataka State Screening Committee on Anti-profiteering, vide the minutes of its meeting held on 31.07.2018 had forwarded an application dated 25.07.2018 filed by the Applicant No. 1 to the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017. The Applicant No. 1 stated that the Respondent had resorted to profiteering in respect of supply of Construction Service related to the purchase of Flat No. 11407, Tower-I, in the Respondent's project "Nikoo Homes-I", Bhartiya City ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablished against the Respondent from the rate of tax angle, by comparing the applicable tax rates in the pre-GST and post-GST periods. In the pre-GST period (April, 2016 to June, 2017), Service Tax@ 6% and VAT@ 10.15% were payable on the construction service and in the post-GST period (July, 2017 to August, 2018), the GST rate was 18% on Construction Service (without 1/3rd abatement on account of land value). Therefore, he had concluded that the applicable tax rate on Construction Services had been increased from 16.15% in the pre-GST period to 18% in the post-GST period. Thus, there was an increase in the rate of tax and there was no additional benefit of ITC with the implementation of GST w.e.f. 01.07.2017, hence the provisions of Section 171 of the CGST Act, 2017 were not attracted. viii. The above Report was considered by the NAA in its meeting held on 19.03.2019 and it was decided to hear the Applicant No. 1 on 04.04.2019, but the Applicant No. 1 was not present during the scheduled hearing. Instead, the Applicant No. 1 vide his email dated 04.04.2019 submitted the demand letters from the Respondent for installments No. 12 & 13 and intimated that the Respondent had charged GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 Towers comprising of 2415 flats in the project Nikoo Homes-I. Each Tower comprised of approx. 250 flats and each Tower was like an apartment/project in itself. The Respondent had completed each Tower one by one and gave possession to the buyers accordingly. The Applicant's Flat No. 11407 was in Tower 1 which was completed in the end of the project by the Respondent. The Respondent had received Occupancy Certificates (OC) from Bruhat Bengaluru Mahanagar Palike (BBMP) starting from Tower 9 to Tower 1 in phases. The OC for Tower No. 7, 8, 9 (called Wing G, H, I) was received on 20-03-2017, for Tower No. 5, 6 (called Wing E, F) was received on 04-12-2017, for Tower No. 3, 4, 10 (called Wing C, D, J) was received on 23-04-2018 and for Tower No. 1, 2 (called Wing A, B) was received on 28-07-2018. Post-GST, electrical, plumbing, carpentry, garden work, painting and multiple other works were done by the sub-contractors for the Respondent and the Respondent had availed ITC on these. He should have passed on that ITC to the buyers but he was not willing to pass on ITC benefit availed by him. He had further submitted his reply to the Point No. 15 of the DGAP's Report dated 07.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f on 28.08.2019 it is observed that the Occupancy Certificates (OCs) for all the Residential Units have been received as per the schedule given in below Table:- Sr. No. No. of Units Wings Date of Issuance 1 837 G, H and I 20-03-2017 2 514 E and F 04-12-2017 3 508 C, D, and J 23-04-2018 4 556 A and B 28-07-2018 TOTAL 2415 As per the above Table, OCs for all the 2415 units had been received till 28.07.2018. Therefore, the final calculation of the ITC benefit which needed to be passed on to the buyers should have been incorporated in the DGAP's Report dated 07.03.2019 as the period covered in the Report was from 1.7.2017 to 31.08.2018. Further, it was observed that the Respondent had obtained all the OCs up to 28.07.2018 and till then, he had sold 2368 flats out of 2415 flats but he had not reversed the proportionate ITC related to the unsold units. 2) Since the OCs had been received in this case, calculation of additional ITC benefit which needed to be passed on by the Respondent could be different from other cases where additional ITC for a specific period and for specific buyers had been calculated. In this case, additional ITC benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,23,03,640 5,23,28,981 15,89,44,691 21,12,73,672 Under VAT Law July '17 to Mar '18 April '18 to Aug '18 Particulars Nikoo-1 Others Total Nikoo-I Others Total Land 32,53,633 1,65,76,27,282 1,66,08,80,915 2,78,43,368 59,23,62,104 62,02,05,472 Sinking 16,96,776 16,96,776 3,16,14,574 3,16,14,574 Premium 6,39,83,334 31,247 6,40,14,581 1,90,36,476 1,34,772 1,91,71,248 City Infra 32,09,386 32,09,386 5,07,56,077 5,07,56,077 CAM 19,16,146 19,16,146 4,35,40,192 4,35,40,192 Construction 2,06,97,63,842 1,65,79,336 2,08,63,43,178 50,83,09,019 19,23,37,978 70,06,46,997 Floorrise 8,48,82,501 7,78,260 8,56,60,761 2,97,95,801 10,44,307 3,08,40,108 Carparking 13,99,78,837 9,41,291 14,09,20,128 4,67,74,882 12,20,796 4,79,95,678 Addl Carpark 61,49,686 61,49,686 7,67,745 7,67,745 BWSSB 1,05,41,934 1,05,41,934 18,51,30,085 18,51,30,085 Club House 49,26,795 49,26,795 7,96,68,899 7,96,68,899 Kitchen 30,32,541 30,32,541 7,20,33,469 7,20,33,469 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,09,59,862 6,47,30,619 Total Credit Available 11,50,34,747 9,89,46,985 21,39,81,732 3,37,70,757 3,09,59,862 6,47,30,619 It was observed from the above submissions filed by the Respondent there were several other projects of the Respondent under the same GST registration number i.e. 29AAACZ3571A1ZF, the profiteering aspect of which was not verified. To keep the investigation rational and justifiable, it was required to investigate all the projects under one GST registration simultaneously. 3. The NAA after considering the various submissions made by the Applicant No. 1 and the DGAP, vide its Interim Order No. 12/2019 dated 15.10.2019, referred the matter back to the DGAP to reinvestigate the matter as per the provision of Rule 133(4) of CGST 2017. 4. Accordingly, the DGAP has carried out necessary re-investigation and on conclusion of the same, a report dated 30.09.2020 was sent to the NAA under Rule 133 (4) of the CGST Rules, 2017 which inter-alia stated that: - i. After receiving reference from the NAA, a letter was issued to the Respondent on 25.10.2019 calling upon him to submit the information/docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod Sept., 2018 to Oct., 2019. b. Copies of GSTR-3B Returns for the period Sept., 2018 to Oct., 2019. c. Copy of quarterly project report submitted to RERA upto Oct., 2019. d. List of home buyers for the project "Nikoo Homes-I". e. Input Tax Credit Register for the period 01.09.2018 to 31.10.2019. f. Reconciliation of GST Input tax credit with Returns. g. Details of ITC reversal on account of unsold units on receipts of Occupancy Certificates in the project "Nikoo Homes-I. vi. That total 10 wings in the impugned project which were completed and received 'OC' in phased manner as per Table-A' given below: Table-A' S.No. Wings No. of Units Date of OC 1 G, H & I 837 20-03-2017 2 E and F 514 04-12-2017 3 C, D and J 508 23-04-2018 4 A and B 556 28-07-2018 Total 2,415 Although the Respondent had received OCs in phased manner, but he had availed input tax credit post receipt of OCs also as the Respondent had received certain invoices (for materials/services procured before issuance of OCs) even after issuance of OCs. Further, the Respondent also did not maintain separate books of accounts for any wings for booking of specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) = [(A)+(B)+(C)] or [(D) + (E)] 36,23,42,273 22,23,64,073 5,51,70,667 27,75,34,740 7. Total Turnover including land value as per Home Buyers List (G) 3,48,86,05,998 1,47,64,89,092 1,94,30,82,661 1,94,30,82,661 8. Total Saleable Area (in sq. ft.) (H) 32,28,666 32,28,666 9. Area Sold relevant to Turnover as per List of Home buyers (I) 30,91,965 20,94,554 10. Relevant CENVAT/INPUT TAX CREDIT (J)= [(F)*(I)/(H)] 34,70,00,782 18,00,46,961 11. Ratio of CENVAT/ Input Tax Credit to Turnover [(K)=(J)/(G)] 9.95% 9.27% From the Table- 'B', it is clear 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 9.95% whereas during the post-GST period (July, 2017 to October, 2019), the percentage was 9.27%. This showed that post-GST, the Respondent had not benefited from any additional ITC and in fact, the ITC availed by the Respondent post introduction of GST was lesser by 0.68% [9.27% (-) 9.95%] of the turnover as compared to the pre-GST period. 7. Further, it is also observed that the Central Government, on the recommendation of the GST Council, had levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent has charged Tax as GST @ 18% without giving any ITC. 10. One more opportunity of hearing on 14.09.2023 was provided to the Applicant No. 1 vide notice dated 21.08.2023 by the Commission, however, the Applicant No. 1 did not appear for the same and vide e-mail dated 17.08.2023 has informed that he would not be able to appear in person for hearing and requested to pass order on the basis of his earlier arguments. 11. This Commission has carefully considered the Reports of the DGAP, submissions made by the Applicant No. 1 and the case record. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent had not passed on the benefit of ITC to him by way of a commensurate reduction in the price of the flat purchased by him from the Respondent. 12. This Commission finds that as per Respondent's submissions the following three projects are under the same GSTIN:- I. Nikko Homes -I II, Nikko Homes -II III. Leela Residences It also finds that the NAA has already issued Order No. 49/2019 dated 14.10.2019 in case of Nikko Homes-II project and Order No. 70/2022 dated 07.09.2022 in case of Leela Residences projects of the Respondent. Further, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project." 15. It is observed that the above provision of the RERA Act, 2016 makes it mandatory for a real estate developer/promoter to maintain separate bank accounts for each of his projects registered separately under the RERA Act, 2016. In view of this, Secretary of Real Estate Regulatory Authority, Karnataka vide letter dated 12.10.2020 and subsequent reminder dated 29.01.2021 and 24.02.2021 was requested to intimate whether the Respondent has maintained separate accounts for Nikko Homes-I, Nikko Homes-II and Leela Residences projects. In reply, vide the letter dated 04.03.2021 Karnataka RERA has informed that M/s. Bhartiya Urban Pvt. Ltd. has maintained separate Bank accounts for above projects. The above information was sought from the Karnataka RERA only to confirm whether the Respondent has kept separate accounts for each project or not. 16. In view of the above findings, we find that the instant case does not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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