Sh. Mohit Arora Vs M/s Lodha Developers Limited (National Anti-Profiteering Authority)
It is established from the perusal of the above facts of the case that the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondents as they have profiteered an amount of Rs. 1,90,04,456/- inclusive of GST @ 12% on the base profiteered amount of Rs. 1,69,68,264/-. The Respondents have also realized an additional amount to the tune of Rs. 37,065/- from the Applicant No. 1 which includes both the profiteered amount @2.62% of the taxable amount (base price) and the GST on the said profiteered amount. Accordingly, the above amounts shall be paid to the above Applicant and the other eligible house buyers by the Respondents along with interest @18% from the date from which these amounts were realised from them till they are paid as per the provisions of Rule 133 (3) (b) of the CGST Rules, 2017.
In view of the above facts 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 buyers of the flats commensurate with the benefit of ITC received by them as has been detailed above. Since the present investigation is only up to 08.2018 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondents. In case this benefit is not passed on the Applicant No. 1 or any other buyer shall be at liberty to approach the State Screening Committee Maharastra for initiating fresh proceedings under Section 171 of the above Act against the Respondents. The concerned CGST or SGST Commissioner shall take necessary action to ensure that the benefit of additional ITC is passed on to the eligible house buyers in future.
It is also evident from the above narration of facts that the Respondents have denied benefit of ITC to the buyers of the flats being constructed by them in their Lodha Eternis Project in contravention of the provision of section 171(1) of the CGST Act, 2017 and have thus resorted to profiteering. Hence, they have committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, they are apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to them directing them to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on them.
The Respondents have themselves admitted that they have passed on the additional ITC benefit of Rs. 139,30,61,6891- in respect of 17 other projects being executed by the Respondents. They have also admitted the same before the DGAP vide Annexure-12 attached with the Report dated 08.11.2018.
The Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondents as ordered by the Authority is passed on to all the eligible buyers. A report in compliance of this order shall be submitted to this Authority by the Commissioners CGST /SGST within a period of 4 months through the DGAP from the date of receipt of this order.
It is also revealed from the Report dated 28.11.2018 that the DGAP vide Col. No. 5 of Table-C had taken the “Total Taxable Turnover as per returns (E)” for the Pre-GST period from 01.04.2017 to 30.06.017 as Rs. 180,84,6,434/-, vide No. 7 “Area sold relevant to Taxable Turnover as per returns (G)” as 1,56,002.00 sq. ft. for the Post-GST period w.e.f. 01.07.2017 to 31.08.018, vide Col. No. 8 the “Relevant CENVAT/ITC (H)=[(C*(G)/(F) or [(D)*(G/(F)” was taken as Rs. 4,74,03,270/- and vide Col. No. 9 the “Ratio of CENVAT/ITC to Taxable Turnover [(I)=(H)/(E)” was calculated as 1.57% for the PreGST Period and ratio of 7.3% was calculated for the Post-GST period thereby stating that the Respondents had got additional benefit of . ITC of 5.75% (7.32%-1.57%) of the total turnover which they were required to pass on to the house buyers. Accordingly, the DGAP had intimated that the Respondents had profiteered an amount of Rs. 4,17,18,5021-. Whereas in the revised Report dated 22.01.019 the figures in Col. No. 5 of Table-A have been taken as Rs. 187,59,54,9011- for the Total Taxable Turnover, in Col. No. 7 the figures taken are 88,100 sq. ft. for the area sold, In Col. No. 9 the ratio has been calculated as 1.51°/0 for the Pre-GST period and 4.13% for the Post-GST period resulting in additional benefit of ITC of 2.62%. The profiteered amount has also been revised to Rs. 1,90,04,456/-. Perusal of para 3 of the revised Report shows that the above figures have been changed on the basis of the claims made by the Respondents in their submissions made before this Authority as well as the DGAP on 10.01.2019 after considering the revised details of the area sold relevant to the taxable turnover as per the home buyers list and the details of the other charges collected during the Pre-GST period. The above contention of the DGAP shows that the team of his office which had investigated the present case had been careless and negligent while examining the returns and the list of the house buyers and had failed to verify and collect correct figures from the Respondents. It is also revealed from the perusal of Column L of Annexure-19 of the revised Report dated 22.01.2019 that the profiteered amount has been computed by applying the additional benefit of ITC @2.56% whereas it should have been calculated by applying benefit @2.62% which again shows carelessness and negligence on the part of the above team. Therefore, it is apparent that the team has not carried out its duties diligently and faithfully while investigating the above case which has resulted in submitting revised Report in which the profiteered amount was drastically changed and wrongly calculated. Accordingly, the DGAP is advised to look in to it administratively and take action.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. This Report dated 28.11.2018 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that vide his application dated 30.05.2018 (Annexure-1 of the Report) submitted to the Maharastra Screening Committee on Anti-profiteering under Rule 128 (2) of the CGST Rules, 2017, the Applicant No. 1 had alleged profiteering by the Respondents while he had purchased Flat No. 704, Building-2, Lodha Eternis, Andheri East, Mumbai, in “Lodha Eternis” project launched by the Respondents. The above Applicant had also alleged that the Respondents had not passed on the benefit of Input Tax Credit (ITC) although they had charged GST @ 12% w.e.f. 01.07.2017 from him. The Maharashtra State Screening Committee had examined the above application and after its prima facie satisfaction that the Respondents had violated the provisions of Section 171 of the CGST Act, 2017, had sent the same with its recommendations for necessary action to the Standing Committee on Anti-profiteering on 13.07.2018 as per the provisions of Rule 128 of the CGST Rules, 2017. This application was duly considered by the Standing Committee on Anti-profiteering in its meetings held on 07.08.2018 & 08.08.2018 and was referred to the DGAP for conducting detailed investigation on the allegations levelled by the Applicant No. 1.
2. The DGAP has stated in his Report that the above flat was booked by the Applicant No. 1 on 21.04.2015 before the GST had come in to force w.e.f. 01.07.2019 and the following demands had been raised on him by the Respondents as per the Table-A given below:-
Table-A
(Amounts in Rs.)
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