Case Law Details
Hemant Kumar Gupta Vs Dreamhome Infrastructures Pvt. Ltd. (NAA)
Authority finds that the benefit of additional Input Tax Credit of 4.81% of the turnover has accrued to the Respondent for the project ‘Heritage Max’. This benefit was required to be passed on to the recipients, however, the same was not done by the Respondent. Thus, Section 171 of the CGST, 2017 has been contravened by the Respondent, in as much as the additional benefit of ITC ©4.81% of the base price received by the Respondent during the period 01.07.2017 to 30.06.2019, has not been passed on by the Respondent to 390 recipients including the Applicant no. 1. These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with Unit no. allotted to such recipients. Therefore, the total additional amount of Rs. 4,74,54,151/- was required to be returned to the Applicant No. 1 and the other such homebuyers. The excess GST so collected from the recipients has also been included by the DGAP in the aforesaid profiteered amount as the excess price collected from the recipients also included the GST charged on the increased base prices. It is also observed that the Respondent has supplied construction services in the state of Haryana only.
The Authority finds that the Respondent vide his letter dated 19.08.2020 stated that he agreed with the amount of profiteering mentioned in the DGAP Investigation Report dated 23.03.2020 and assured the Authority that he would pass on the benefit of ITC to the respective homebuyers. Later, the Respondent had also claimed that he had passed on the said amount of benefit of ITC to his homebuyers and submitted credit notes, statements of accounts and Intimation letters to homebuyers as supporting documents.
From the above discussions, it is clear that the Respondent has profiteered an amount of Rs. 4,74,54,151/- during the period of investigation. Therefore, in view of the above facts, this Authority under Rule 133(3)(a) of the CGST Rules orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. Since, the present investigation is only up to 30.06.2019, any benefit of ITC which shall accrue subsequently shall also be passed on to the buyers by the Respondent. In relation to the period of the present investigation by the DGAP, the amount of benefit of ITC shall be passed on to the recipients of supply
It is also evident from the above narration of the facts that the Respondent has denied benefit of ITC to the buyers of his flats in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he had thus resorted to profiteering. Hence, he has committed an offence for violation of the provisions of Section 171 (1) during the period from 01.07.2017 to 30.06.2019 and therefore, appears to be liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, the provisions of Section 171 (3A) have been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.17.2017 to 30.06.2019 when the Respondent had committed the above violation and hence, the penalty under Section 171 (3A) cannot be imposed on the Respondent for such period. Accordingly, notice for imposition of penalty is not required to be issued to the Respondent.
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