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TMI Blog2024 (8) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... a detailed investigation under Rule 129 of the Central Goods & Service Tax (CGST) Rules, 2017 on an application filed by Applicant No. 1 under Rule 128 of the CGST Rules, 2017 wherein he had alleged that the Respondent had not passed on the benefit of reduction in rate of tax or input tax credit (ITC) to him by way of commensurate reduction in the price of the Flat No. 601 purchased from the Respondent in his project "Swastik Heights", situated at Ahmedabad, Gujarat in terms of Section 171 of the CGST Act, 2017. He also alleged that the Respondent had not passed on any benefit of ITC till date which was already received by him. He charged GST @ 8% on the base price of 25,00,000/-for the flat and promised to pass on the benefit of ITC at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential-cum-commercial complex. He was engaged in business of construction of residential-cum-commercial properties at Swastik heights, Behind Savya Skyz, Vaishnodevi to Zundal 200 ft Ring Road, Zundal, Ahmedabad - 382421. b) That there was only one project "Swastik Heights" and no other site/project c) That the Respondent got registered under the GST Act on 27.02.2018, so Tran-1 and Tran-2 was not applicable. d) That the firm got registered business after 01.07.2017 under the GST Act, so he had not filed the ST-3 or VAT returns for the period April, 2016 to June, 2017. e) That the Respondent had opted for the old regime as specified for item (ie) or (if), against serial number 3 in the table provided in the Notification No. 03/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affordable and low-cost houses upto a carpet area of 60 square meters was further reduced to 12% GST (effective rate was 8%. in view of 1/3rd abatement on value), vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018 (in respect of affordable and low-cost houses upto a carpet area of 60 square meters). vi. The DGAP has also observed that the land for the project "Swastik Heights" was purchased by the Respondent on 24.05.2017. The commencement certificate for the said project was issued by the Ahmedabad Urban Development Authority on 08.03.2018. As per Gujarat RERA Registration website, the project "Swastik Heights" was registered under Reg. No. PR / GJ / GANDHINAGAR / GANDHINAGAR / AUDA /MAA02618/ 090518 on 09.05.2018 vii. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to the allegation of Applicant No. 1, the DGAP has found that since the project "Swastik Heights" had commenced on 08.03.2018 which was much after the implementation of GST w.e.f. 01.07.2017,there was no pre-GST turnover or ITC availability which could be compared with the post-GST turnover and ITC to determine whether there was any benefit that was required to be passed on by way of reduced price. Further, as the Respondent had opted for an effective GST rate of 8%along with ITC, there was no benefit of reduced rate to be passed on to the unit buyers. ix. The DGAP has therefore concluded that Section 171 (1) of the CGST Act,2017 which requires that "any reduction in rate of tax on any supply of goods or services or the benefit of inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g post-GST era was not given to him through commensurate reduction in prices. 4. The DGAP vide his clarifications dated 10.10.2023 has submitted that during the investigation, the DGAP has found that the project commenced on 08.03.2018 which was much after the implementation of GST w.e.f. 01.07.2017. Hence, there was no pre-GST turnover or ITC that could be compared with the post-GST turnover and ITC to determine whether there was any benefit that was required to be passed on by way of reduced prices. Hence, Section 171 (1) of the Central Goods and Services Tax Act, 2017 is not applicable in the present case. 5. Vide CCI letter dated 20.03.2024, the present case was sent back to DGAP directing it to re-investigate 42 cases pertaining to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 10.08.2023 and the documents placed on record. The Commission needs to determine as to whether there was any reduction in the GST rate or the benefit of ITC and whether the benefit of rate reduction or ITC was passed on or not to the recipients as provided under Section 171 of the CGST Act, 2017. 8. It is clear from the DGAP's Report that the Respondent had started the above project in the post-GST regime as the commencement certificate was issued to him on 08.03.2018 by the Ahmedabad Urban Development Authority and the Respondent was registered under GST w.e.f.27.02.2018. As per the ITC register submitted by the Respondent, the first purchase invoice was issued on 27.02.2018. On perusal of the copies of sale agreements of all th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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