Sh. Bhanja Kishore Pradhan Vs HCBS Promoters & Developers Pvt. Ltd (National Anti-Profiteering Authority)
Facts of the Case:
The brief facts of the case are that the Applicant No. 1 filed application, dated 19.09.2018, before the National Anti-profiteering Authority under Rule 128 (1) of the CGST Rules, 2017. The said application was forwarded by the Authority to the Standing Committee on Anti-profiteering for further necessary action. The Applicant No. 1, vide his above application, alleged profiteering by the Respondent in respect of purchase of Flats in his “Sports Ville” project located in Sector-2 & 35, Sohna, Gurgaon. The above Applicant also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) availed by him by way of commensurate reduction in the price of the above flats. The aforesaid application was considered by the Standing Committee on Anti-profiteering, in its meeting held on 27th December, 2018, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in to the complaint according to Rule 129 (1) of the CGST Rules, 2017.
Held by NAA:
NAA observe that the DGAP, has reported that the Respondent had claimed to have already passed on benefit of Rs. 1,42,56,347/- to his home buyers during the period from 01.07.2017 to 31.08.2019. As evidence, he has submitted list of all his home buyers mentioning the amount of ITC benefit passed on to each of them, Customer-wise ledgers in respect of some of the home buyers which mention entries indicating “being GST input benefit transfer to customer” and has also submitted samp letters sent to his home buyers in support of his having passed on the benefit of ITC to them in terms of Section 171 of CGST Act. Further, perusal of Table-D’ of the DGAP Report dated 02.07.2019 suggests to us that an amount of Rs. 1,42,56,347/- is claimed to have been passed on by the Respondent to his home buyers on account of ITC benefit. However, it is also clear from Table-‘D’ of the above DGAP Report that claim of the Respondent of having passed on the benefit of Rs. 1,42,56;347/-, has not been verified at any stage by the DGAP. Accordingly the DGAP is directed to further verify the amount of ITC benefit claimed to have been passed on to his home buyers by the Respondent as per the provisions of Rule 133 (4) of the above Rules and submit his Report clearly mentioning the verified amount of benefit passed on by the Respondent to his home buyers and the balance amount still to be passed on to each of the home buyers.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 02.07.2019 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 filed application, dated 19.09.2018, before the National Anti-profiteering Authority under Rule 128 (1) of the CGST Rules, 2017. The said application was forwarded by the Authority to the Standing Committee on Anti-profiteering for further necessary action. The Applicant No. 1, vide his above application, alleged profiteering by the Respondent in respect of purchase of Flats in his “Sports Ville” project located in Sector-2 & 35, Sohna, Gurgaon. The above Applicant also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) availed by him by way of commensurate reduction in the price of the above flats. The aforesaid application was considered by the Standing Committee on Anti-profiteering, in its meeting held on 27th December, 2018, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in to 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 18.01.2019 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 on either 24.01.2019 or 25.01.2019 in accordance with Rule 129 (5) of the above Rules but the Respondent did not avail of the said opportunity. Vide e-mail dated 21.06.2019, the Applicant No. 1 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 No.1 did not avail of the said opportunity.
3. The DGAP has covered the period from 01.07.2017 to 31.12.2018 during the current investigation. The time limit to complete the investigation was extended by this Authority, vide its order dated 19.03.2019 in terms of Rule 129 (6) of the above Rules.
4. The DGAP, vide his above mentioned Report, has stated that the Respondent had submitted replies vide his letters/emails dated 31.01.2019, 01.02.2019, 07.02.2019, 20.02.2019, 08.03.2019, 18.03.2019, 15.05.2019, 24.05.2019, 31.05.2019, 14.06.2019, 21.06.2019 and 28.06.2019. The submissions of the Respondent were summed up by the DGAP as follows:
a) The Respondent had stated that after implementation of GST, he had informed the homebuyers regarding the benefits to be passed on, on account of the implementation of the Central Goods and Services Tax Act, 2017.
b) The Respondent had stated that the Applicant No. 1 had already approached him and he had redressed the above Applicant’s grievance.
c) The Respondent had also submitted sample copies of letters (all dated 03.11.2019) issued to the Applicant No. 1 and other home buyers, informing them about the benefit of input tax credit as per his calculation and credited the same to them.
5. The Respondent had 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 August, 2017 to December, 2018.
b) Copies of GSTR-3B Returns for the period August, 2017 to December, 2018.
c) Copies of ST-3 and VAT Returns for the period of April, 2016 to June, 2017.
d) Copies of all demand letters and sale agreement/contract issued to the Applicant No. 1.
e) Copy of Audited Balance Sheet for FY 2016-17 & FY 2017-18.
f) Copy of Electronic Credit Ledger for the period 01.07.2017 to 31.12.2018.
g) CENVAT/Input Tax Credit register for 2016-17 and 2017-18 and April, 2018 to December, 2018.
h) Details of VAT, Service Tax, ITC of VAT, CENVAT Credit for the period April, 2016 to June, 2017,
i) List of home buyers in the project “Sports Ville”.
j) Copies of RERA documents.
k) Copy of Tran-1 filed in December, 2017.
6. The DGAP has also stated that all the documents placed on record were carefully examined by him and he had 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 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.
7. The Respondent, vide letter dated 20.02.2018, had submitted the copy of RERA documents of the project “Sports Ville” wherein the basic sale prices of Rs. 3,600/- per square feet for carpet area and Rs. 500/-per square feet for balcony area, were mentioned. The details of payment schedule in respect of the flat purchased by the Applicant No. 1 were furnished by the DGAP as given in Table-A’ below:-
Table-`A’
(Amount in Rs.)
