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Case Law Details

Case Name : Sh. Naresh K. Khetan Vs M/s. Azeagaia Development Pvt. Ltd. (National Anti-Profiteering Authority)
Appeal Number : Case Mo. 23/2020
Date of Judgement/Order : 05/05/2020
Related Assessment Year :
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Sh. Naresh K. Khetan Vs M/s. Azeagaia Development Pvt. Ltd. (National Anti-Profiteering Authority)

The present Report dated 24.09.2019 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 21.01.2019 (Annex-1) before the Standing Committee on Anti-profiteering, under Rule 128 of the Central Goods and Services Tax Rules, 2017 alleging profiteering by the Respondent in respect of the purchase of Flat no. A-802 in Respondent’s project “Azea Botanica”, situated at Plot No. 11/GH/8. Vrindavan Yojana No.3, Sector-11, Lucknow and had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the prices of the apartment purchased by him, on implementation of the GST w.e.f. 01.07.2017. The said application was examined by the Standing Committee on Anti-profiteering in its meeting held on 11.03.2019 and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 (1) of the CGST Act, 2017, had forwarded the same with its recommendation to the DGAP for investigation to determine whether the benefits of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients.

Held by NAA

We observe that the Respondent, vide his submissions before us, has himself admitted that he has resorted to profiteering in as much as the ITC benefit that has accrued to him was not passed on to his customes/ flat buyers/ recipients, by way of commensurate reduction in the prices of the flats/ units. We also observe that the Respondent is in agreement with the DGAP’s report and that he has stated that he is ready to pass on the said benefit to his customes/ flat buyers/ recipients.

We further observe that the DGAP has calculated the total profiteered amount as Rs. 2,72,21,532/- for the period from 07.2017 to 31.03.2019, out of which, an amount of Rs. 2,04,77,678/- was claimed to be passed on by the Respondent to the home buyers by way of reduction in the demand raised by him on his customers/ flat buyers/ recipients. The DGAP, vide his report dated 02.01.2020, has also reported that the claim of the Respondent that he had passed on the ITC benefit amounting to Rs. 2,04,77,6781- to his customers/ flat buyers by way of reducing the amount from their demand letters, has been duly verified by the DGAP with the data submitted by the Respondent and had been found to be correct as per the calculations made in the table-D & para-22 of the DGAP Report dated 24.09.2019. Table-D of the DGAP Report dated 24.09.2020 reveals that the amount of ITC benefit required to be passed on by the Respondent to the customers/flat buyers was Rs. 2,72,21,5321-, out of which an amount of Rs. 2,04,77,678/- had been claimed to have been passed on to his customers by the Respondent. The same has been verified by the DGAP. Hence, only the balance profiteered amount of Rs. 73,61,290/- is still required to be passed on by the Respondent, which was in the process of being passed on by him to his customers/ flat buyers/ recipients.

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