Director General of Anti-Profiteering Vs ATS Homes Pvt. Ltd. (NAA)
The brief facts of the present case, are that a reference was received by the DGAP from the Standing Committee on Anti-profiteering on 15.10.2020 to conduct a detailed investigation in respect of an application filed under Rule 128 of the Central Goods and Services Tax Rules, 2017, alleging profiteering by the Respondent in respect of purchase of a flat in the Respondent’s project ‘ATS Picturesque Reprieves‘, situated at Plot No. SC-01, Sector-152, Noida, Uttar Pradesh. The Applicant No. 1 alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction and charged GST @ 12 % on the amount due to him against payment. He had submitted that the Respondent always communicated that he was working on the computation and would pass on the benefit of ITC (if determined) after the project completion/ handing over the project. However, he had not given certainty of doing the same. The Applicant No. 1 providing a copy of Allotment letter (consisting breakup of consideration, payment plan, and flat description) along with his application in form APAF, has requested to keep his application confidential.
In the instant case, there is no reduction of rate of tax during the relevant period and the only issue which is required to be decided by the Authority is as to whether Respondent is required to pass on the benefit of input tax credit. As mentioned in earlier paragraphs, DGAP has carried out investigation in the subject matter and collected relevant information/evidences from the Respondent and after the analysis of the same the DGAP has come to a conclusion that the Respondent as gained 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 to the homebuyers by way of commensurate reduction in prices in terms of Section 171 of the CGST Act, 2017 during the period 01.07.2017 to 30.09.2020.
In view of the above facts and findings discussed in the earlier paras, this Authority agrees with the methodology adopted by the DGAP in its Report to calculate the profiteered amount. Hence, this Authority determines that the Respondent has realized an additional amount of Rs. 12,78,61,818/- which includes both the profiteered amount @ 5.69% of the taxable amount (base price) and GST @ 12% on the said profiteered amount from the 535 buyers/recipients (other than the Applicant No. 1) during the period from 01.07.2017 to 30.09.2020 which was required to be passed on to home buyers/customers/recipients of supply of his impugned project. Since the Applicant No. 1, had booked his unit in the impugned project and paid the amount in pre-GST period only hence the profiteering in respect of the Applicant No.1 has not been calculated by the DGAP.
The details of eligible buyers to whom supply was made by the Respondent in his impugned Project and to whom benefit of ITC is required to be passed on by the Respondent during the aforesaid period along with details of such additional amount is given in Annexure-`A’ to this Order.
Since, all the home buyers/recipients of supply are identifiable as per the documents placed on record therefore, the Respondent is directed to pass on the above said profiteered amount along with the interest @ 18% per annum (from the dates from which the said profiteered amount was collected by him from each of them till the date such amount is passed on/returned/refunded) to above said buyers/recipients, within a period of 3 months from the date of passing of this Order as per the details mentioned in Annexure-`A’, failing which the said amounts shall be recovered as per the provisions of the CGST Act, 2017.
For the reasons mentioned hereinabove and in the given facts and circumstances and also stated position of law we find that the Respondent has denied the benefit of ITC to the buyers of his flats/customers/recipients in contravention of the provisions of Section 171 ( 1 ) of the CGST Act, 2017. The Authority holds that the Respondent has committed an offence by violating the provisions of Section 171 (1) and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. As the said provision has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019, the Respondent is liable to penalty for the amount profiteered by him from 1.01.2020 onwards. Accordingly notice be issued to the Respondent for such purpose.
Accordingly, this Authority under Rule 133 (3) (a) of the CGST Rules, 2017, orders that the Respondents shall reduce the prices to be realized from the home buyers/recipients of supply in the above Project commensurate with the benefit of ITC received by him as detailed above.
This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST, Noida and SGST, Lucknow, Uttar Pradesh to monitor compliance of this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent (GST Registration No. 09AAJCA4360K1ZF) as determined by the Authority, is passed on to all the eligible home buyers/recipients of supply. It may be ensured that the benefit of ITC is passed on to each home buyer/recipient of supply as per Annexure-A attached with this Order along with interest @18% as prescribed. In this regard an advertisement of appropriate size to be visible to the public may also be published in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of Respondent M/s ATS Homes Pvt. Ltd., 71192, Deepali, Nehru Place, New Delhi-1 10 019, for his Project “ATS Picturesque Reprieves”, situated at Plot No. SC-01, Sector-152, Noida, Uttar Pradesh and amount of profiteering Rs. 12,78,61,818/-, so that the concerned home buyers/recipients of supply can claim the benefit of ITC, if not passed on. Home buyers/recipients of supply may also be informed that the detailed Order is available on this Authority’s website www.naa.gov.in.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
The instant Report dated 02.09.2021, has been furnished to National Anti-Profiteering Authority (this Authority) by the Applicant No. 2 i.e. Director General of Anti-Profiteering (DGAP) under Rule 129(6) of the Central Goods and Services Tax Rules, 2017. The brief facts of the present case, are that a reference was received by the DGAP from the Standing Committee on Anti-profiteering on 15.10.2020 to conduct a detailed investigation in respect of an application filed under Rule 128 of the Central Goods and Services Tax Rules, 2017, alleging profiteering by the Respondent in respect of purchase of a flat in the Respondent’s project “ATS Picturesque Reprieves”, situated at Plot No. SC-01, Sector-152, Noida, Uttar Pradesh. The Applicant No. 1 alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction and charged GST @ 12 % on the amount due to him against payment. He had submitted that the Respondent always communicated that he was working on the computation and would pass on the benefit of ITC (if determined) after the project completion/ handing over the project. However, he had not given certainty of doing the same. The Applicant No. 1 providing a copy of Allotment letter (consisting breakup of consideration, payment plan, and flat description) along with his application in form APAF, has requested to keep his application confidential.
2. On receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 15.10.2020, a Notice under Rule 129 of the CGST Rules 2017, was issued on 06.11.2020 by the DGAP, calling upon the Respondent to reply as to whether he admitted that the benefit of input tax credit had not been passed on to the recipients 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 to furnish all documents in support of his reply.
3. The Respondent was afforded an opportunity by the DGAP to inspect the non-confidential evidences/information during the period 11.11.2020 to 12.11.2020, the Respondent rough his authorized representative, had availed of the said opportunity on 11.12.2020 and collected the non-confidential documents submitted by the Applicant No. 1.
4. The Applicant No. 1 vide e-mail dated 17.07.2021 (Confidential), was afforded an opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 1.9.07.2021 or 20.07.2021 however, he vide his e-mail dated 17.07.2021 (Confidential), expressed his inability to visit the office due to on-going pandemic situation in the country and requested to share the details on e-mail therefore, the DGAP vide e-mail dated 19.07.2021 (Confidential), had provided the non-confidential details furnished by the Respondent, to him.
5. The period covered by the current investigation is from 07.2017 to 30.09.2020.
6. As per Rule 129(6) of the CGST Rules, the statutory time limit to complete the present investigation was upto 14.04.2021 but due to force majeure caused in the light of Covid-19 pandemic, the investigation could not be completed on or before the aforesaid date. However, in the light of the Notification No. 14/2021-Central Tax dated 01.05.2021, as amended vide Notification No. 24/2021-Central Tax dated 01.06.2021 issued by the CBIC, the last date for submission of report was extended upto 30.06.2021. Further, Hon’ble Supreme Court of India passed an Order dated 08.03.2021 in Suo Moto Writ Petition (Civil) No. 3 of 2020, wherein it was stated that “in cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.” The above relief’ has been extended and the period from 14.03.2021 till further orders shall also stand excluded in computing the limitation period as per the Hon’ble Supreme Court’s Order dated 27.04.2021 passed in Miscellaneous Application No. 665/2021 in SMW (C) No. 3/2020.
7. In response to the Notice dated 06.11.2020 and various reminders and Summons, the Respondent has submitted his replies vide letters/e-mails dated 26.11.2020, 18.12.2020, 23.12.2020, 22.01.2021, 02.02.2021, 03.02.2021, 05.02.2021, 26.02.2021 23.03.2021, 26.03.2021, 15.04.2021, 20.07.2021, 23.07.2021 and 27.08.2021, which have been summed up by the DGAP as under:-
(a) The Respondent was engaged in the construction of residential projects and presently he has two projects in running. The project `ATS Picturesque Reprieves’ at Noida was launched in the end of 2016 which is still under construction and Occupancy Certificate has not been received by him.
(b) He has opted old scheme for discharging GST @ 12% (after 1/3rd abatement towards Land) in accordance with the Notification No. 3/2019-Central Tax (Rates) dated 29.03.2019 w.e.f. 01.04.2019.
(c) The instant project “ATS Picturesque Reprieves Phase 1” has 932 units with total saleable area of 21,79,800 sq. ft. The tower wise summary details are as under in Table-‘A’:
Table-A
