Milan Pankaj Kothari Vs Sri Dutt Constructions (NAA)
The brief facts of the present case are that an application was filed before the Maharashtra State Screening Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017 by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of a Flat No. 303, Wing-D, in the Project Garden Avenue K-4, Virar West, Palghar, Maharashtra. The Applicant No. 1 alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price.
The only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue, the DGAP in his Report, has stated that ITC as a percentage of the turnover which was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 1.03% and during the post-GST period (July-2017 to March-2019), it was 0.63%. On this basis, the DGAP has concluded his Report with the findings that the Respondent had neither been benefited from additional ITC nor there had been a reduction in the tax rate in the post-GST period for the Project “Garden Avenue K-4”.
The Authority also finds the Applicant No. 1 vide his above submissions has also stated that he has satisfied with the findings in the DGAP’s Investigation Report dated 29.01.2021.
In view of our above facts the Authority has no reason to differ from the Report of DGAP and we therefore agree with his findings since there was no reduction in the rate of tax nor there was increased additional benefit on account of ITC. Hence, the provisions of Section 171 of CGST Act, 2017 are not liable to be Invoked in this case. The Authority concludes that the instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the Respondent has neither been benefited from additional ITC nor has there been a reduction in the tax rate in the post-GST period.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 29.01.2021 has been received in National Anti- profiteering Authority (NM) from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after a detailed investigation, under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the present case are that an application was filed before the Maharashtra State Screening Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017 by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of a Flat No. 303, Wing-D, in the Project “Garden Avenue K-4”, Virar West, Palghar, Maharashtra. The Applicant No. 1 alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price.
2. The DGAP in his Report dated 29.01.2021, inter-alia stated that: –
i. The Maharashtra State Screening Committee on Anti-profiteering examined the said application and forwarded the said application with his recommendation, to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the Rules.
ii. The aforesaid reference was examined by the Standing Committee on Anti-profiteering in his meeting held on 13.09.2019 and vide minutes of meeting received by the DGAP on 09.10.2019, it was decided to forward the same to the DGAP, to conduct a detailed investigation In the matter.
iii. On receipt of the reference from the Standing Committee, a notice under Rule 129 of the CGST Rules, 2017 was issued by the DGAP on 23.10.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all the supporting documents. Further, in the said notice dated 23.10.2019, the Respondent was given an opportunity to inspect the non-confidential evidences/information submitted by the Applicant No. 1, during the period 30.10.2019 to 31.10.2019. The Respondent did not avail of the said opportunity.
iv. In response to the notice, the Respondent did not submit the requisite documents on the due date. Hence, reminder letters were sent to the Respondent on 25.11.2019, 03.01.2020, 23.01.2020, 18.02.2020, and 26.02.2020. The Respondent did not submit all the requisite documents even after several reminders letters, therefore, summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules, was issued on 13.05.2020 to Sh. Purushottam Patel (Respondent/ Partner) to submit the relevant documents on or before 22.05.2020.
v. In compliance to the said summons, the Respondent replied vide e-mail dated 27.05.2020 and requested for time to submitted the relevant documents. Therefore, 2nd summons under Section 70 of the Central Goods and Service Tax Act, 2017 read with Rule 132 of the Rules, was issued on 02.06.2020 to Sh. Purushottam Patel (Partner) to submit the relevant documents on or before 20.06.2020.
vi. In compliance to 2nd summons, the Respondent did not submitted reply/ documents on due date. Hence, 3′d summons under Section 70 of the Central Goods and Service Tax Act, 2017 read with Rule 132 of the Rules, was issued on 02.07.2020 to Sh. Purushottam Patel (Partner) to submit the requisite documents on or before 24.07.2020.
vii. In compliance to 3rd summons, the Respondent submitted certain details /documents vide e-mail/letter dated 13,07,2020, 20.07.2020, 30.09.2020, and 01.10.2020. However, complete documents were not submitted. Hence, 4th summons under Section 70 of the Central Goods and Service Tax Act, 2017 read with Rule 132 of the Rules, was issued on 26.10.2020 to Sh. Purushottam Patel (Partner) to submit the remaining documents on or before 05.11.2020.
viii. Even after the 4th summons, the Respondent did not submit complete documents on due date. Therefore, letter dated 09.11.2020 was sent to the Jurisdictional Commissioner to collect the pending documents from the Respondent and forward the same to the DGAP office. In compliance, the jurisdictional office forwarded the pending documents vide letter dated 09.12.2020. Further, the Respondent also submitted the required details vide e-mail dated 03.12.2020 and 07.12.2020.
ix. Vide e-mail dated 12.01.2021, the Applicant No. 1 was given an opportunity to inspect the non-confidential evidences/reply furnished by the Respondent, on 15.01.2021 or 18.01.2010. The Applicant No. 1 replied vide e-mail dated 12.01.2021 and informed that he was staying abroad and requested to share the non-confidential documents submitted by the Respondent on e-mall or WhatsApp. Since, the Respondent had declared all the documents as confidential, an e-mail was sent to the Respondent on 12.01.2021 to provide the summary of confidential and non-confidential documents. However, the Respondent failed to submit the summary of confidential and non-confidential documents, and declared all the documents as confidential and thus the same were not shared with the Applicant No. 1.
x. The period covered by the current investigation was from 01.07.2017 to 31.03.2019. (Restricted to 31.03.2019, as the Respondent opted for new scheme in terms of Notification No 03/2019 (Central Rate) dated 29.03.2019).
xi. The time limit to complete the investigation was upto 08.04.2020. However, due to prevalent pandemic of COVID-19 in the country, vide Notification 35/2020-Central Tax dated 03.04.2020 issued by the Central Board of Indirect Taxes and Customs under Section 168 (A) of the CGST Act, 2017, it was notified that where any time limit for completion/furnishing of any report, had been specified in, or prescribed or notified under the CGST Act, 2017 which fell during the period from the 20th day of March, 2020 to the 29th day of June, 2020, and where completion or compliance of such action had not been made within such time, then, the time limit for completion or compliance of such action, should be extended upto the 30.06.2020. Vide Notification 55/2020-Central Tax dated 27.06.2020, Notification No. 65/2020 dated 01.09.2020, and Notification No. 91/2020 dated 14.12.2020, it was further extended upto 31.03.2021.
xii. In response to the notice dated 23.10.2019, the Respondent replied vide letters/emails dated 13.01.2020, 28.01.2020, 01.02.2020, 26.02.2020, 06.03.2020, 27.05.2020, 13.07.2020, 20.07.2020, 30.09.2020, 01.10.2020, 03.12.2020, 07.12.2020, 05.01.2021, 12.01.2021, 20.01.2021 and 25.01.2021. The replies of the Respondent are summed up as follows: –
a. he was engaged in providing construction services and developing two projects at Virar West namely Garden Avenue K-4 (RERA Reg. No. P99000004018) and Garden Avenue K-3 (RERA Reg. No. P99000007110) and charging 1 % without ITC w.e.f 01.04.2019 in terms of Notification No 03/2019 (Central Rate) dated 29.03.2019).
b. initially he kept common account for both the Projects, as there was no clarity regarding accounts and the same was accepted at the time of RERA registration. However, from 21.07.2018 as per the provisions of RERA Act, 2016 he had maintained separate bank accounts for both the Projects namely Garden Avenue K-4 and Garden Avenue K-3. The Respondent further requested to restrict the investigation to the project Garden Avenue K-4 only as the Applicant No. 1 belongs to the said Project. Also, it was registered under separate RERA registration and having separate bank account. The details of bank accounts was given below: –
Project Name: – Garden Avenue K-3
