Shri Gaurav Gulati Vs M/s Paramount Propbuilt Pvt. Ltd. (National Anti-Profiteering Authority)
1. The present Report dated 02.04.2019 has been received from the Applicant No. 2 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 case are that the Applicant No. 1 had filed a complaint on 19.06.2018 before the Uttar Pradesh State Screening Committee on Anti-profiteering, under Rule 128 of the CGST Rules;2017 in which he had alleged that he had booked a flat, in the Respondent’s project Paramount Emotions” situated in GH-05A, Sector 1. Greater Noida and the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price of the flat, on introduction of the Goods & Services Tax (GST) w.e.f. 01.07.2017. The Uttar Pradesh State Screening Committee on Anti-profiteering on prima facie having satisfied itself that the Respondent had not passed on the benefit of ITC had forwarded the said application with its recommendation to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the above Rules.
2. The above reference was examined by the Standing Committee on Anti-profiteering in its meeting held on 06.09.2018 and it had forwarded the same to the DGAP for detailed investigation. The application was sent to the DGAP along with the details submitted by the Applicant No. 1 viz. the duly filled in Form APAF-1, Copy of the demand letter issued at the time of possession, Copy of the letter of offer of possession and copy of the Voter ID card.
3. The DGAP on receipt of the application had issued notice dated 15.10.2018 to the Respondent to intimate as to whether he admitted that the benefit of ITC had not been passed on by him to the Applicant No. 1 by way of commensurate reduction in the price of the flat 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 supporting documents. The Respondent was also given an opportunity to inspect the non-confidential evidence/information submitted by the above Applicant which was not availed by him. The above Applicant was also given an opportunity to inspect the non-confidential documents/reply furnished by the Respondent which was availed by him.
4. The Applicant No. 1 had submitted before the DGAP that he was in possession of receipt of payment of Rs. 8,00,000/- dated 29.03.2018 which he had paid to the Respondent for purchase of the flat. He had also informed that the Respondent had given false information and sent a mail to all the buyers in September, 2017 to pay the instalment which was due in March. 2018, in advance in October, 2017 and in case they paid it. the Respondent would charge 4.5% GST instead of 12% or 18%.
5. The DGAP had sought extension of time for completing the investigation which was extended by this Authority vide its order dated 31.12.2018 in terms of Rule 129 (6) of the CGST Rules, 2017.
6. The period of the investigation held by the DGAP in this case is from 01.07.2017 to 31.08.2018.
7. The DGAP in his report has stated that the Respondent had given his submissions vide letters/emails dated 01.11.2018. 05.11.2018, 16.11.2018, 30.11.2018. 07.12.2018. 04.01.2019, 12.02.2019. 08.03.2019, 13.03.2019, 15.03.2019 and 18.03.2019 in which the Respondent had stated that he had received the Completion Certificate of the project in February, 2018 from the Greater Noida Industrial Development Authority (GNIDA). Thereafter, he had demanded the final dues from the Applicant No. 1 by sending the letter of possession in which he had suo moto passed on the GST benefit of Rs. 30,104/- by reducing the Basic Selling Price (BSP) of the flat, which he had mentioned clearly in the letter.
8. The Respondent had also submitted that he had not filed the GSTR-1 and GSTR-3B returns for the period from April, 2018 to September, 2018 as most of his customers had defaulted on their payments which had caused severe cash crunch to him. The Respondent had further claimed that the slowdown in the construction industry with sales going down and unwillingness of the banks to support the industry, had led to a situation where the interest and other costs had arisen and the developers were not in a position to meet their statutory and other obligations.
9 The Respondent had further informed the DGAP that the Applicant No. 1 had transferred an amount of Rs. 8,00.000/- by RTGS on 28.03.2018 but he had not informed the Respondent about this payment and in March, 2019, the Applicant No. 1 had claimed to have paid the said amount with proof of payment and thereafter it was duly accounted for by the Respondent in March, 2019 and the above amount was kept in the client suspense account during the period from March, 2018 to March, 2019.
10. The Respondent had also furnished the Copies of GSTR-1 returns for the period from July, 2017 to March, 2018, Copies of GSTR-3B returns for the period from July. 2017 to March, 2018, Tran-1 statement for the month of July, 2017, Copies of VAT & ST-3 returns for the period from April, 2016 to June. 2017, Copies of Electronic Credit Ledger for the period from July, 2017 to March, 2018, Copies of all the demand letters, receipts and sale agreement in the name of the Applicant No. 1. details of the applicable Tax rates- pre-GST and post-GST, Balance Sheet and the Cost Audit Report for the FY 2016-17, Copy of project report submitted to the RERA, CENVAT Credit Register for the FY 2016-17 and 2017-18 (upto 30.06.2017), GST ITC Register for the period from July. 2017 to March. 2018, details of VAT/Service Tax/GST for the period of April, 2016 to August, 2018, List of home buyers in the project “Paramount Emotions” and Copy of the Completion Certificate dated 12.02.2018 before the DGAP.
11. Based on the documents filed by the Respondent, the DGAP has submitted that details of the amounts and taxes paid by the Applicant No. 1 to the Respondent were as has been shown in the Table given below:-
Table A
(Amount in Rs.)
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