Varun Goel Vs Town Park Buildcon Private Ltd. (NAA)
a. The Respondent vide his submissions dated 05.04.2022 has contended that the DGAP has not incorporated the ITC of VAT in the pre-GST period for the computation of profiteering which ought to have been done. He has further submitted before this Authority that the said ITC on VAT credit was Rs. 83,52,074/- for the period from April 2016 to June 2017 has been allowed to him by the concerned statutory Authority, in support of which he has submitted VAT Assessment Orders for the period from April, 2016 to June, 2017.
b. The Authority finds that the Assessment Orders for the period from April 2016 to June 2017 issued by the VAT Authorities in respect of the Respondent have never been placed before the DGAP during the course of the investigation and hence the same have not been incorporated in the computation of profiteered amount. The Authority further finds that the ITC of VAT, as much as is allowed vide the said VAT Assessment ‘ Orders for the period from April 2016 to June 2017 (copies enclosed as Annexure I and II) shall be incorporated into the computation of profiteered amount by the DGAP subject to verification of the authenticity of the same.
c. The Authority therefore directs the DGAP to ascertain the authenticity of the VAT Assessment Orders submitted by the Respondent for the period from April 2016 to June 2017 and if verified from the State GST Commissioner/Uttar Pradesh VAT Department, the DGAP shall incorporate the amounts, as allowed by the concerned statutory Authority on assessment, in the computation of profiteered amount by including the same as ITC in the pre GST period and recalculate the profiteered amount and submit his Report to this Authority.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 27.11.2020 has been received from the Applicant No. 3 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 case are that the Applicant No. 1 had filed an application under Rule 128 (1) of the CGST Rules, 2017 against the Respondent alleging profiteering in respect of construction service supplied by him. The Applicant No. 1 had stated that he had purchased a flat in the Respondent’s project “White Orchid” and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the prices. The Standing Committee on Anti-profiteering, vide the minutes of its meeting held on 19.08.2020, forwarded one more application filed by the Applicant No. 2. The period covered for the current investigation was from 01.07.2017 to 30.09.2019
2. It has been reported by the DGAP that since the Respondent was discharging his output tax liability on deemed 10% value addition on purchase value since there was no direct relation of turnover reported in VAT Returns with the amount collected from home buyers, therefore, the credit of VAT paid on the purchase of inputs was not considered in the calculation of ITC ratio to Taxable Turnover ratio for the period prior to June, 2017. The DGAP further reported 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 0.90% whereas during the post-GST period (July, 2017 to September, 2019), the said percentage was 8.10% and therefore the Respondent appeared to have benefited from additional ITC to the tune of 7.20% (8.10% (-) 0.90%] of the turnover. Therefore, the Respondent had benefited by an additional amount of ITC of Rs. 4,40,72,367/- which included GST @12% on the base amount of Rs. 3,93,50,328/-. This amount was inclusive of Rs. 1,73,160/-which was the benefit of TX required to be passed on to the Applicant No. 1 and Its. 1,70,354/- which was the benefit of ITC required to be passed on to the Applicant No. 2.
3. The above Report of the DGAP was considered by this Authority in its meeting held on 01.12.2020 and it was decided to direct the Respondent and the Applicant No. 1 & 2 to file their consolidated written submissions in respect of the report of the DGAP by 18.09.2020. The Respondent vide his letter dated 18.01.2021 had filed his written submissions, inter-alia stating:-
a. That he was undertaking a real estate project at Greater Noida West which had the following details:
