Shri Ramesh Kumar Yadav Vs M/s Vatika Ltd. (National Anti-Profiteering Authority)
The contentions of Applicant No. 1 mainly stress upon the fact that the construction was not completed before the GST had come into force and the payment was made by him in the GST regime along with GST. He had also alleged that the Respondent had not passed on the benefit of ITC. It can be concluded that none of his contentions fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the Respondent had not availed any ITC in the post-GST regime as has been stated by the DGAP in his Report. The allegation of not passing on the benefit of ITC is not established. Even the charging of GST @18% in post-GST regime is not within the scope of Section 171 of CGST Act, 2017.
Similarly, contentions of Applicant No. 2 are that the Respondent had collected/recovered GST from him beyond the terms of Builder-Buyer Agreement (BBA) for the services which had been completed in the pre-GST regime and that he had not passed on the benefit of the additional ITC available to the Respondent after implementation of the GST w.e.f 01.07.2017. The DGAP in his investigation Report has clearly stated that in the post-GST regime the Respondent had not availed ITC and there was no ITC available with the Respondent, the benefit of which could have been passed on to the recipients. The provisions of Section 171 of the CGST Act, 2017 are not attracted in the present case and therefore, the contentions of the Applicant No. 2 also do not fall under the scope of Section 171 of the CGST Act, 2017.
Further, it has been revealed from the records that Respondent had completed the project “Independent Floor Phase-II” prior to implementation of the GST and he had neither availed ITC on any of the inputs procured in the GST Regime, nor had he availed/carried forward the pre-GST credit pertaining to the stock held in hand as on 30.06.2017. Therefore, he is not liable to pass on the benefit of ITC to the above Applicants. Therefore, the provisions of Section 171(1) of the CGST Act, 2017 which state that “a reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices”, have not been contravened in the present case, as the same are not even applicable.
In view of the above, the allegation that the Respondent has not passed on the benefit of ITC is not sustainable.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 25.02.2019 has been received from the Applicant No. 3 i.e. the Director General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129(6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the present case are that the Haryana State Screening Committee on Anti-Profiteering, vide the minutes of its meeting held on 20.06.2018 had forwarded an application dated 08.05.2018 filed by the Applicant No. 1 tc the Standing Committee on Anti-Profiteering under Rule 128 of the CGST Rules, 2017. The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of supply of construction services related to purchase of an apartment in the project “Independent Floor Phase-II” at Plot No. 18, Ground Floor, Street No. F 3.1, Sector-82, Vatika India Next, Gurugram-122004. The Applicant No. 1 had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST w.e.f. 01.07.2017. The said application was examined by Haryana State Screening Committee in its meeting held on 20.06.2018 and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 of the CGST Act, 2017 and forwarded the same with its recommendation to the Standing Committee on Anti-Profiteering for further action in terms of Rule 128 of the CGST Rules, 2017. The said application was examined by the Standing Committee on Anti-Profiteering in its meeting held on 07.08.2018 & 08.08.2018 and it had referred the application to the DGAP for investigation under Rule 129(1) of the CGST Rules, 2017 to determine whether the benefits of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients.
2. Meanwhile, the Applicant No. 2 was also made a co-applicant on 29.11.2018 in the present case as he had alleged that the Respondent had already recovered Service Tax from the previous allottee of the unit which was allotted to him on cancellation and therefore, the GST should not be recovered from him and also, that the benefit of ITC had not been passed on to him by the Respondent by way of commensurate reduction in price after implementation of the GST w.e.f. 01.07.2017.
3. Thereafter, the DGAP issued a Notice to the Respondent on 11.09.2018 under Rule 129 of the above Rules, 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 & 2 by way of commensurate reduction in prices 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 supporting documents. The Respondent was also given an opportunity to inspect the non-confidential evidences/information furnished by the above Applicants during the period 17.09.2018 to 19.09.2018. However, the Respondent did not avail of the said opportunity. Both the Applicants i.e. the Applicant No. 1 & No. 2 were also given an opportunity to inspect the non-confidential evidences/reply furnished by the Respondent on 11.02.2019 or 12.02.2019. Both the Applicants i.e. the Applicant No. 1 & No. 2 availed of the said opportunity and inspected the documents on 12.02.2019. The DGAP had carried out investigation in this case for the period from 01.07.2017 to 31.08.2018.
4. The DGAP in his report stated that the main issues for determination were whether there was benefit of reduction in the rate of tax or the ITC on the supply of the construction service by the Respondent after implementation of the GST w.e.f. 01.07.2017 and if so, whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the CGST Act, 2017.
5. The DGAP has further stated that the Respondent had submitted replies vide letters/emails dated 24.09.2018, 01.10.2018, 02.11.2018, 19.11.2018, 10.01.2019, 24.01.2019, 04.02.2019 and 06.02.2019 stating that the construction of the project “Independent Floor Phase-l!” was completed prior to 01.07.2017 and that he had neither availed ITC on any of its inputs procured in the GST regime, nor did he avail/carry forward the pre-GST credit pertaining to the stock held in hand as on 30.06.2017. Further, in reply to the allegation of Applicant No. 2 regarding collection of Service Tax from the previous allottee of the Unit No. 48, Ground Floor, S-1, Sector-82, Vatika India Next, the Respondent submitted that the Applicant No. 2 was the first allottee of the said unit and it was never allotted to anyone before him. The Respondent had also submitted the following documents for the period July-2017 to August-2018 for all the projects related to the Applicant No. 1 and 2
a. Copies of GSTR-1 returns.
b. Copies of GSTR-3B returns.
c. Copies of Tran-1 returns in respect of transitional credit availed.
d. Copies of VAT & ST-3 returns.
e. Electronic Credit ledger.
f. Copies of all demand letters and sale agreement/contract and construction agreement.
g. Tax rates- pre-GST and post-GST.
h. Copy of Balance Sheet for FY 2016-17 & 2017-18.
i. Details of turnover and ITC for the project “Independent Floor Phase-II”.
j. List of home buyers in the project “Independent Floor Phase-II”.
6. The DGAP in his Report has stated the details of ITC availed by the Respondent and his turnover from the project “Independent Floor Phase-11” during the period April-2016 to August-2018 (Pre-GST and Post-GST) was as per the Table below:-
Table
(Amount in Rs.)
