Case Law Details
Sh. Rajender Meena Vs Logix Infrastructure Pvt. Ltd (National Anti-Profiteering Authority)
We take note of the fact that Respondent vide his submissions dated 05.06.2020 has accepted his liability of passing on the benefit of additional ITC as per the report of the DGAP and has also submitted that he had passed on the benefit of Rs. 13,32,278/- to his customers/flat buyers by way of credit notes and by way of reducing the instalments to be paid by his homebuyers against the demands pending from them and the proof of the same has also been submitted before the DGAP. This claim of the Respondent has been accepted as verified by the DGAP vide his supplementary report dated 20.07.2020. We observe that the DGAP has verified the detail of the ITC passed on by the Respondent to his homebuyers/ recipients (355 home buyers) from the ledger account, Credit Notes (20) and Annexure-17 of the DGAP’s report.
We also observe that the Applicant No. 1 & 2 have stated that they had booked their flats with the builder on 31.10.2013 and as per the builder buyer agreement, the flats were to be delivered by 31.10.2015. The Respondent raised the final invoices on 19.01.2020 after receipt of the Completion Certificate from NOIDA in January 2017 but one year after receiving the Completion Certificate and by that time GST had been implemented thus resulting in extra financial burden to them which was Rs. 3,00,000/- approx. In this regard, it is pertinent to mention that as per the provisions of Section 171 of the CGST Act, 2017 read with Rule 127 and 133 of the CGST Rule 2017, this Authority has only been mandated to ensure that bot benefits of tax rate reduction and ITC are passed on to the customers. Therefore, this Authority has no mandate to look into the matter whether the Respondent has wrongly charged GST from the Applicants. The Applicants may take up the matter with the jurisdictional CGST/ SGST officers.
It is also apparent to us from the above Reports that in respect of the `Blossom County’ project the CENVAT credit/ITC as a percentage of the total turnover which was available to the Respondent during the pre-GST period was 0.71% and during the post-GST period this ratio was 0.85% as per the Table-C mentioned above. Therefore, the Respondent has benefited from the additional ITC to the tune of 10.25% (10.25% – 0%) of the total turnover in respect of the above Phase which he was required to pass on to the flat buyers of the above Phase. It has also found that the Respondent has not reduced the basic price of his flats by 0.14% in case of the above Project due to additional benefit of ITC resulting in contravention of the provisions of Section 171 of the CGST Act, 2017. It is also evident that the amount of benefit of ITC which has not been passed on by the Respondent or the profiteered amount came to Rs. 13,32,278/- which included 12% GST on the basic profiteered amount. This amount also included the profiteered amount of Rs. 3,880/- and Rs. 3,929/-including 12% GST in respect of the Applicant No. 1 and 2. The details of all the buyers who have purchased flats from the Respondent along with their unit numbers and the profiteered amount in respect of each buyer have been provided vide Annexure-17 attached with the Report of the DGAP, who are required to be passed on the above amount as the benefit of ITC.
Based on the above findings this Authority hereby determines the profiteered amount as Rs. 13,32,278/- as per the provisions of Section 171 (1) read with Rule 133 (1) of the above Rules which includes GST @ 12% on the base profiteered amount of Rs. 11,89,534/-. The profiteered amount in respect of the Applicant No. 1 & 2 is held to be Rs. 3,880/- and Rs. 3,929/- respectively. The Respondent has claimed that he had passed on the benefit to his homebuyers and the above claim of the Respondent has been verified by the DGAP vide his supplementary report dated 20.07.2020. The DGAP has reported that the Respondent had submitted the ledger account in respect of 355 home buyers and credit notes (20) on a sample basis wherein the details of the benefit of ITC passed on to the recipients (355 home buyers) have been mentioned and that the details of the ITC passed on to the recipients (355 home buyers) have been verified from the ledger account and the credit notes against Annexure-17 of the report of the DGAP dated 03.04.2019, and the same were found to be in order. However, the Applicant No. 1 & 2 have not submitted acknowledgement of having received the benefit. Therefore, the concerned jurisdictional Commissioner is directed to ensure that the amount profiteered by the Respondent is passed on to the above Applicants.
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