Case Law Details
Smt. Naina Rani Vs Pivotal Infrastructure Pvt. Ltd. (NAA)
It has been revealed that the Respondent was given benefit of ITC on the supply of Construction Services after the implementation of GST w.e.f. 01.07.2017 and the Respondent was required to pass on such benefit of ITC to the homebuyers/shop buyers by way of commensurate reduction in prices in terms of Section 171 of the CGST Act, 2017. It is observed from the DGAP’s Report dated 30.03.2021 that the benefit was not commensurately passed on by the Respondent to his recipients, taking into account the aforesaid Input Tax Credit availability post GST and the details of the amount collected from the customers during the period 01.07.2017 to 29.02.2020. The amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to Rs. 2,73,04,997/- which includes GST on the profiteering amount. Further, The Respondent claimed that he had already passed on substantial amount of GST ITC in accordance with the requirements of Section 171 of the CGST Act, 2017 to the homebuyers/shopkeepers. The Respondent had also claimed that he had passed on the benefit of Rs. 1,29,17,507/- to homebuyers/shopkeepers.
This Authority finds that the Respondent vide his letter dated 12.04.2022 has accepted the DGAP’s Report dated 30.03.2021 and requested to conclude the case. The Respondent has also claimed that he has passed on major part of profiteered amount i.e 1,29,17,507/- and he will pass on the remaining ITC benefit soon after the order of this Authority.
For the reasons mentioned hereinabove and in the given facts and circumstances and also stated position of law, we find no reason to differ from the Report of the DGAP that the benefit of additional Input Tax Credit of 3.06% of the turnover has indeed accrued to the Respondent for the project “Riddhi Siddhi”. This benefit was required to be passed on to the recipients. However, the same was not done commensurately by the Respondent. Section 171 of the CGST, 2017 has been contravened by the Respondent, in as much as the additional benefit of ITC @3.06% of the base price has not been passed on by the Respondent to 1039 recipients of supply. These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with Unit no. of homebuyers/shopkeepers allotted to such recipients. Therefore, the total additional amount of Rs. 2,73,04,997/- was required to be returned to such recipients.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
Please become a Premium member. If you are already a Premium member, login here to access the full content.
