Case Law Details
Rajesh Shaw Vs Eden Realty Ventures Pvt. Ltd. (NAA)
The Applicant No.1 Rajesh Shaw alleged that the Respondent No. 1 Eden Realty Ventures Pvt. Ltd. had not passed on the benefit of ITC to him by way of commensurate reduction in prices and charged GST @12% on the amount due to him against payments made for project Siddha Eden Lakeville, situated at Lake View Park Road, Banhooghly, Kolkata, West Bengal-700108 on 17.09.2016.
It is observed from the Report of the DGAP that the ITC, as a percentage of the turnover, that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 1.16%, whereas, during the post-GST period (July-2017 to September-2019), it was 6.85% for the project ‘Siddha Eden Lakeview’. This confirms that, post-GST, the Respondent No. 1 & 2 have been benefited from additional ITC to the tune of 5.69% (6.85% – 1.16%) of their turnover for the project ‘Siddha Eden Lakeview’ and the same was required to be passed on to the customers/flat buyers/recipients. Therefore, the Respondent No. 1 had benefit by an additional amount of ITC amounting to Rs. 4,11,40,502/- (which includes GST @12%), similarly, the Respondent No. 2 had benefited by an additional amount of ITC amounting to Rs. 2,50,94,164/- (which includes GST @12%). The DGAP has calculated the total amount of ITC benefit to be passed on to all the customers/flat buyers/recipients as Rs. 6,62,34,666/- for the project ‘Siddha Eden Lakeview’. The Respondent No. 1 is required to pass on Rs. 96,857/- as the additional benefit of ITC to the Applicant No. 1 and Rs. 4,10,43,645/- to other 264 recipients. Further, the Respondent No. 2 is required to pass on Rs. 2,50,94,164/- to 270 other flat buyers/recipients in the project ‘Siddha Eden Lakeview’ for the period from 1.07.2017 to 30.09.2019.
Authority finds no reason to differ from the above-detailed computation of profiteering in the DGAP’s Report or the methodology adopted. The Authority finds that the Respondent No. 1 has profiteered by an amount of Rs. 4,11,40,502/- and the Respondent No. 2 has profiteered by an amount of Rs. 2,50,94,164/- during the period of investigation i.e. 01.07.2017 to 30.09.2019. The Authority determines an amount of Rs. 4,11,40,502/- (including 12% GST) under section 133(1) as the profiteered amount by the Respondent No. 1 and an amount of Rs. 2,50,94,164/-(including 12% GST) as the profiteered amount by the Respondent No. 2 under section 133(1) from their 265 (including Applicant No. 1) and 270 homebuyers/customers/recipients of supply, respectively (as per Annexure ‘A’ to this Order), which shall be refunded/returned/passed on by the Respondents to the respective homebuyers/customers/recipients of supply along with interest @18% thereon, from the date when the amounts were profiteered by them till the date of such return/refund/payment, in accordance with the provisions of Rule 133 (3) (b) of the GCST Rules 2017. The amount profiteered is Rs. 96,857/- (including GST) in respect of the Applicant No.1. Since the Respondent No. 2 had availed the entire CENVAT/ITC for the project (including units pertaining to the Respondent No. 1), therefore the aforesaid profiteered amount of Rs. 4,11,40,502/- (inclusive of GST) has to be passed on/refunded/returned by the Respondent No. 2 to the Respondent No. 1, who in turn is required to pass on/return/refund the benefit to his recipients including the Applicant No. 1.
This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that The Respondent No. 1 & 2 shall reduce the prices to be realized from the homebuyers/customers/recipients of supply commensurate with the benefit of ITC received as per the Methodology as has been detailed above.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
