Manabendra Nath Basu Vs Paribar Estates Pvt. Ltd (NAA)
It is clear from the perusal of Section 171 of the CGST Act, 2017 read with Rule 127 of the CGST Rules, 2017 that this Authority is required to determine whether any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit has been passed on to the recipients by way of commensurate reduction in prices or not. Accordingly this Authority has to examine whether there has been any benefit of reduction in the rate of tax or benefit of ITC to the Respondent that needs to be passed on to the Applicant No. 1 by way of commensurate reduction in prices.
It is also apparent from the various documents submitted by the Respondent and the DGAP that the Applicant No. ‘I had purchased Flat No. 05, Type-B, 2nd floor in the project Kishalay Abasan, 14/3 Ghoshpara being developed
It is further clear from the record that prior to the implementation of the GST w.e.f. 01.07.2017, Service Tax on construction service was chargeable @ 4.50% (vide Notification No, 14/2015-ST dated 19.05.2015). however, after implementation of the GST w.e.f. 01.07.2017, GST on construction service was changeable @ 18% (effective rate was 12% in view of 1/3rd abatement on value) which was imposed vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 which was further reduced for low cost affordable housings 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 house upto a carpet area of 60 square meters) and hence it is established that there was no rate reduction w.e.f. 01.07.2017 in the case of construction service for low cost affordable houses which the above Applicant has purchased. Hence, no benefit of tax reduction was required to be passed on to him.
It is also revealed from the record that during the pre-GST era the Respondent was eligible to avail CENVAT Credit of Service Tax paid on the input services and post GST, the Respondent was eligible to avail the input tax credit of GST paid on all the inputs and input service including the sub-contracts. However, the Respondent has not availed any benefit of CENVAT or ITC in the pre and post GST era and hence, there was no additional benefit available to the Respondent which was to be passed on to his
It is further revealed from the report of the Deputy Commissioner of State GST that the Respondent has not availed benefit of ITC after coming in to force of the GST and he has charged GST @18% which was required to be charged as per the Notification dated 01.07.2017.
Based on the above facts it is established that the Respondent was not liable to pass on the benefit of ITC to the Applicant No. 1 and thus he has not contravened the provisions of Section 171 of the CGST Act, 2017. Therefore, we find no merit in the application filed by the Applicant No. 1 and the same is accordingly dismissed.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. This Report dated 30.08.2019 had been received on 04.09.2019 from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the present case are that an application dated 23.08.2018 was filed before the Standing Committee on Anti-profiteering under Rule 128 (1) of the CGST Rules, 2017 by the Applicant No. 1 alleging profiteering by the Respondent. The Applicant No. 1 had alleged in his application that he had purchased Flat No. 05, Type-B, 2nd floor, in the project Kishalay Abasan, 14/3 Ghoshpara and the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price, on introduction of the GST w.e.f. 01.07.2017. The West Bengal State Screening Committee on Anti-profiteering had examined the above application in its meeting held on 19.11.2018 and observed that there was merit in the complaint as preliminary investigation conducted by it revealed contravention of Section 171 of the Central Goods and Services Tax Act, 2017. The State Screening Committee had forwarded the said application with its recommendation along with the investigation report of the Deputy Commissioner of State GST to the Standing Committee on Anti-profiteering on 12.10.2018, for further action, in terms of Rule 128 (2) of the above Rules.
2. The DGAP has stated in his Report dated 30.08.2019 that the aforesaid reference was examined by the Standing Committee on Anti-profiteering, in its meeting held on 11.03.2019, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter and the minutes of the meeting were received by him on 27.03.2019. Accordingly, it was decided to initiate investigation and collect evidence necessary to determine whether the benefit of input tax credit has been passed on by the Respondent to the above Applicant in respect of construction service supplied by the Respondent.
3. The Applicant had submitted the following documents along with his application:-
(a) Copy of APAF-1 Form.
(b) Copy of Agreement for Sale
(c) Online complaint invoice-NAACMP1674 dated 04.09.2018.
4. The DGAP has also stated that perusal of the above application revealed that the Applicant No. 1 had booked Flat No.-05, Type-B, 2nd floor, in the Respondent’s project “Kishalay Abasan”, 14/3 Ghoshpara in the pre-GST era. In response to the Notice dated 09.04.2019, the Respondent has submitted his reply vide letters and e-mails dated 08.05.2019 and 27.05.2019 along with the following documents/information:-
(a) Copies of GSTR-1 Returns for the period from July, 2017 to March, 2019.
(b) Copies of GSTR-3B Returns for the period from July, 2017 to March, 2019.
(c) Copies of ST-3 Returns for the period from April, 2016 to June, 2017.
(d) Copies of sale agreement/contract with the above
(e) Copies of Audited Balance Sheets for the FY 2016-17 & FY 2017-18.
5. The DGAP has further stated that the Respondent, vide his letter dated 27.05.2019, submitted copy of the sale agreement wherein the Respondent had agreed to sell a flat measuring 950 sq. ft. (super built up area) at the basic sale prices of Rs. 3,000/- per square feet to the Applicant No. 1. The details of payment schedule in respect of the flat purchased by the applicant are furnished in the Table-A below:-
