Smt. Naina Rani Vs Pivotal Infrastructure Pvt. Ltd. (NAA)
Fact of the Case:
The brief facts of the case are that vide her application dated 30.11.2018 filed before the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017, the Applicant No. 1 had alleged profiteering by the Respondent in respect of purchase of Flat in the “Ridhi Siddhi” project of the Respondent situated at Sector-62, Gurgaon. The above Applicant had also alleged that the Respondent had not passed on the benefit of ITC (ITC) availed by him by way of commensurate reduction in the price of the above flat. The aforesaid reference was considered by the Standing Committee on Anti-profiteering, in its meeting held on 11th March, 2019, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in the complaint according to Rule 129 (1) of the CGST Rules, 2017.
Held by NAA:
A careful perusal of Table-LB’ submitted by the DGAP shows that the Respondent has been given credit of Rs. 43,75,985/- on account of the ITC earned by him on the Value Added Tax (VAT) which he has paid on the purchase of the goods during the period from April, 2016 to June, 2017 while executing the above ‘Affordable Housing Project’. However, it has not been mentioned in the Report that the said credit of VAT was in accordance with the provisions of Section 42 (1) and (2) of the Haryana Value Added Tax Act, 2003 and whether the above credit has been allowed to him by the appropriate Assessing Authority as specified under the Act. No reasons have been given by the DGAP in his Report why the Respondent was eligible to claim the above ITC. It has also not been explained whether the Respondent was discharging his VAT liability as a regular registered dealer or was as a composition dealer. It has also not been stated in the Report whether the Respondent was eligible to charge VAT from the buyers under the Haryana Affordable Policy-2013 and whether he had collected VAT from his buyers or not? Perusal of the supplementary Report dated 19.02.2020 furnished by the DGAP and Table-‘D’ of his first Report dated 16.09.2019 shows that the Respondent has passed on the benefit of Rs. 1,21,08,722/- to the flat and shop buyers. In this connection it would be pertinent to mention that the DGAP has not verified even a single acknowledgement submitted by the Respondent from the flat or the shop buyers to establish that they have actually received the benefit of GST as has been claimed by the Respondent. The DGAP has also not produced even a single acknowledgement/statement of the buyers obtained/recorded by him to confirm whether the benefit of ITC has been passed on to the buyers or not. In the absence of such acknowledgement/statement the claim of the Respondent that he has passed on the benefit of ITC to his buyers cannot be accepted. Based on the above reasons the Reports dated 16.09.2019 and 19.02.2020 furnished by the DGAP cannot be accepted and accordingly, the DGAP is directed to further investigate the present case under Rule 133 (4) of the CGST Rules, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
The present Report dated 16.09.2019 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, on 23.03.2019. The brief facts of the case are that vide her application dated 30.11.2018 filed before the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017, the Applicant No. 1 had alleged profiteering by the Respondent in respect of purchase of Flat in the “Ridhi Siddhi” project of the Respondent situated at Sector-62, Gurgaon. The above Applicant had also alleged that the Respondent had not passed on the benefit of ITC (ITC) availed by him by way of commensurate reduction in the price of the above flat. The aforesaid reference was considered by the Standing Committee on Anti-profiteering, in its meeting held on 11th March, 2019, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in the complaint according to Rule 129 (1) of the CGST Rules, 2017.
2. On receipt of the recommendation from the Standing Committee on Anti-profiteering, the DGAP had issued Notice dated 04.04.2019 under Rule 129 (3) of the above Rules, asking the Respondent to intimate as to whether he admitted that the benefit of ITC had not been passed on to the above Applicant by way of commensurate reduction in the price of the flat and in case it was so, to suo-moto compute the quantum of the same and mention it in his reply to the Notice along with the supporting documents. The Respondent was given opportunity to inspect the non-confidential evidence/information furnished by the Applicant No. 1 during the period between 10.04.2019 to 12.04.2019 in accordance with Rule 129 (5) of the above Rules but the Respondent did not avail of the said opportunity. Vide e-mail dated 19.06.2019, the above Applicant was also given opportunity to inspect the non-confidential documents/reply submitted by the Respondent on 24.06.2019 or 25.06.2019. However, the Applicant did not avail of the said opportunity.
3. The DGAP has covered the period from 01.07.2017 to 31.03.2019 during the current investigation. The time limit to complete the investigation was extended by this Authority, vide its order dated 19.06.2019. in terms of Rule 129 (6) of the above Rules.
4. The DGAP has stated in his above Report that the Respondent had submitted replies vide his letters/emails dated 16.04.2019, 25.04.2019, 29.04.2019, 07.06.2019, 11.06.2019, 17.06.2019 and 01.08.2019. The submissions of the Respondent were summed up by the DGAP as is mentioned in the subsequent Para.
5. The Respondent has stated before the DGAP that he had informed the above Applicant over telephone and through e-mail regarding passing on the benefit of ITC. He has also stated that a number of changes were taking place in the GST regime, such as, change in the GST rates and applicability of GST on Affordable Housing Projects. The Respondent has further stated that he had ensured that the benefit of actual ITC would be passed on to all his customers. The Respondent, vide his e-mail dated 07.06.2019, had submitted sample copies of letters issued to individual home buyers, informing them about the benefit of ITC as per his calculation and credit of the same to them. The Respondent had submitted the ledger account of the Applicant No. 1 showing an entry dated 31.03.2019 of Rs. 12,517/- (including 8% GST on Rs. 11,590/-) as GST benefit passed on and copy of the credit note dated 31.03.2019 issued to the above Applicant. The Respondent had also submitted that he had passed on total benefit of Rs. 1,21,08,722/- to the home buyers.
6. The Respondent has also submitted the following documents/information to the DGAP vide his above mentioned letters/e-mails during the course of the investigation:-
(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 VAT Returns (including all annexures) & ST-3 Returns for the period from April, 2016 to June, 2017.
(d) Copies of all demand letters issued and sale agreement made with the Applicant.
(e) Copies of Balance Sheets for the FY 2016-17 & 2017-18.
(f) Copy of Electronic Credit Ledger for the period from 01.07.2017 to 31.03.2019.
(g) CENVAT/ITC Register for the FY 2016-17, 2017-18 and 201819.
(h) Details of VAT, Service Tax, ITC of VAT and CENVAT Credit for the period from April, 2016 to June, 2017, for the project “Riddhi Siddhi”.
(i) List of home buyers in the project “Riddhi Siddhi” alongwith details of benefit passed on.
(j) Copy of RERA Registration Certificate of the Project “Riddhi Siddhi”.
(k) Copy of Tran-1 Statement.
7. The DGAP has also submitted that all the documents placed on record were carefully examined by him and he has found that the main issues for determination were whether there was reduction in the rate of tax or benefit of ITC on the supply of construction service made by the Respondent after implementation of the GST w.e.f. 01.07.2017 and in case it was so, whether the Respondent had passed on the above benefits to the home buyers as per the provisions of Section 171 of the CGST Act, 2017 or not.
8. The DGAP has further submitted that the Respondent, vide his letter dated 15.04.2019 had submitted that he had informed the Applicant from time to time through telephonic conversation about the benefit of ITC and assured the above Applicant that he would pass on the above benefit to all his customers as early as possible. The Respondent, vide his e-mail dated 07.06.2019 had submitted sample copies of letters issued to the individual flat buyers, informing them about the benefit of ITC as per his calculation and credit of the same to their accounts. The Respondent, vide his e-mail dated 17.06.2019, had also submitted the ledger account of the Applicant No. 1 showing an entry dated 31.03.2019 of Rs. 12,517/- (including 8% GST on Rs. 11,590/-) as GST benefit passed on and copy of the credit note dated 31.03.2019 issued to the above Applicant.
9. The Respondent had submitted a copy of RERA Registration Certificate of his Project “Riddhi Siddhi” and the payment schedule for the purchase of flats at the basic sale price of Rs. 4,000/- per square feet for the carpet area and Rs. 500/-per square feet for the balcony area. The Respondent, vide letter dated 25.04,2019 and subsequent e-mails, had submitted copies of demand letters issued to the above Applicant. The details of amounts and taxes paid by the Applicant No. 1 to the Respondent were furnished by the DGAP as given is mentioned in Table-A below:-
Table-A’
(Amount in Rs.)
