Paramjeet Rathee Vs Supertech Limited (NAA)
The Applicant No. 1 has further contended that while calculating profiteering, the DGAP has not considered the type of sale consideration i.e. Subvention Plan or CLP Plan, pre-GST impact of ITC on cost, Cost Sheet Proforma for Goods/Services pre-GST and post-GST, Summary of purchased materials/imputs versus Construction Stages and the Project report submitted to RERA. The above claim of the Applicant is not sustainable because to determine the quantum of profiteering, the ratio of ITC to the turnover during the pre-GST (April-2016 to June-2017) and post-GST (July-2017 to March-2019) periods has been compared by the DGAP as per the data submitted by the Respondent and it was found that the percentage of ITC availed by the Respondent in the post-GST period was very low in comparison to pre-GST period and hence, provisions of Section 171 of the Act have not been contravened in the present case.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 30.08.2019 has been received 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. The brief facts of the present case are that the Applicant No. 1 had filed an application dated 03.07.2018 (Annexure-1) before the Standing Committee on Anti-Profiteering under Rule 128 of the Central Goods & Services Tax (CGST) Rules, 2017. The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of the supply of construction services related to the purchase of Flat J-66C, in the Respondent’s project “Officer Enclave”, Sector-2, Sohna Road, Gurugram. 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.
2. The said application was examined by Standing Committee on Anti-Profiteering in its meeting held On 11.03.2019 and forwarded with its recommendation to the DGAP for detailed investigation under Rule 129(1) of the CGST Rules, 2017 to investigate whether the benefit of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients. The DGAP had received the minutes of the meeting of the Standing Committee on Anti-Profiteering on 27.03.2019.
3. The DGAP has stated that the Applicant No. 1 had submitted a copy of the Application and copies of his written communication with the Respondent.
4. Thereafter, the DGAP had issued a notice to the Respondent on 04.2019 (Annex-3) 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 by way of commensurate reduction in price with respect to the project mentioned in his Application dated 03.07.2019 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 evidence/information furnished by the above Applicant No. 1 during the period 15.04.2019 to 17.04.2019. However, the Respondent did not avail of the said opportunity. Vide e-mail dated 07.08.2019 (Annex-4), the Applicant No. 1 was also given an opportunity to inspect the non-confidential evidence/reply furnished by the Respondent on 13.08.2019 or 14.08.2019. However, the Applicant No. 1 did not avail of the said opportunity. The DGAP has stated that the investigation in this case had been carried out for the period from 01.07.2017 to 31.03.2019 and the time limit to complete the investigation was extended up to 26.09.2019, by this Authority, in terms of Rule 129(6) of the Rules, vide Order F. No. 22011/NAA/19/2018/3819 dated 19.06.2019 (Annex-5).
5. In his Report the DGAP has stated that in response to the notice dated 09.04.2019, the Respondent replied vide letters/e-mails dated 10.05.2019 (Annex-6), 18.062019 (Annex-7), 22.07.2019 (Annex-8), 07.08.2019 (Annex-9) and 08.08.2019 (Annex-10). Vide the aforementioned letters, the Respondent also submitted the following documents/information:‑
(a) Copies of GSTR-1 & GSTR-3B Returns for the period July, 2017 to March, 2019.
(b) Copies of GSTR-3B Returns for the period July, 2017 to December, 2018.
(c) Copies of Tran-1 Returns for transitional credit availed by the Respondent.
(d) Copies of VAT & ST-3 Returns for the period April, 2016 to June, 2017.
(e) Electronic Credit Ledger for the period July, 2017 to March, 2019.
(f) Tax rates, pre-GST and post-GST.
(g) Copy of Balance Sheet for FY 2016-17 & 2017-18.
(h) The payment plan of the Applicant alongwith agreement and demand letters.
(i) Details of turnover and ITC in respect of the project “Officer Enclave”.
(j) List of home buyers in the project “Officer Enclave”.
6. The DGAP has reported that the Respondent had requested to treat all the data submitted by him as confidential except the allotment letter and the ledger of Applicant No. 1, in terms of Rule 130 of the Rules.
7. The DGAP has also reported that he has carefully examined the various replies of the Respondent and the documents/evidence placed on record. The main issues for determination were whether the Respondent had benefited from the reduction in the rate of tax or the ITC after implementation of the GST w.e.f. 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.
8. The DGAP has further reported that the Respondent had submitted a copy of the sale agreement dated 23.06.2016, for the sale of flat no. J-66C to Applicant No. 1 in his project “Officer Enclave”, measuring 1375 square feet, at the basic sale price of Rs. 3550/- per square feet. The details of amounts and taxes paid by the Applicant to the Respondent has been furnished by the DGAP in Table-A’ below:-
Table-‘A’
(Amount in Rs.)
