Parvez Khan Vs Pearlite Real Properties Pvt. Ltd. (NAA)
Facts of the Case:
The brief facts of the present case are that an application dated 15.10.2018 was filed before the Standing Committee on Anti-profiteering, under Rule 128 (1) of the Central Goods and Services Tax (CGST) Rules, 2017 by the Applicant No. 1, alleging profiteering by the Respondent in respect of purchase of Flat No. F1-203 in the Respondent’s project “Godrej-24”, Hinjewadi, Pune, Maharashtra-411057. The Applicant No. 1 had alleged that the Respondent had not passed on the benefit of input tax credit (ITC) to him by way of commensurate reduction in price on implementation of GST w.e.f. 01.07.2017, in terms of Section 171 (1) of the CGST Act, 2017. The DGAP has reported that the aforesaid reference was examined by the Standing Committee on Anti-profiteering, in its meeting held on 13.12.2018, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. On perusal of the said application, the DGAP has found that the Applicant No. 1 had booked a flat in the Respondent’s project “Godrej-24”, on 19.04.2017, i.e. in the pre-GST era. Further, the Applicant No. 1 had also submitted the copies of the cost sheets issued by the Respondent before and after implementation of the GST, booking form and statements of account along with his application.
Held by NAA:
It is also apparent from the record that the DGAP has taken total saleable area as 5,34,471 sq. ft. in Table B of his Report while computing ratio of ITC to turnover for the pre and post GST periods whereas the Respondent has claimed that this area was 9,48,024 sq. ft. The above contention of the Respondent also needs to be investigated and correct figure is required to be ascertained. It is further apparent from the perusal of para 18 of the Report dated 26.06.2019 furnished by the DGAP that the Respondent had booked 892 units. Whereas the Respondent has vehemently claimed in his submissions that the total number of the units in his “Godrej 24” project was 816. Since, there is vast difference in the number of units claimed by both the parties the same is required to be reconciled. The Respondent has also contended that the DGAP has considered the area of cancelled flats while computing the profiteered amount in his Report which has resulted in incorrect profiteering. The above claim of the Respondent is also required to be investigated. The Respondent has also claimed to have passed on the ITC benefit of 3.88% to his buyers which also needs to be verified. Based upon the above facts the present Report filed by the DGAP cannot be accepted and hence the present case is remanded to him for further investigation as per the provisions of Rule 133 (4).
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 26.06.2019, has been received on 04.07.2019 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 and Services Tax (CGST) Rules, 2017. The brief facts of the present case are that an application dated 15.10.2018 was filed before the Standing Committee on Anti-profiteering, under Rule 128 (1) of the Central Goods and Services Tax (CGST) Rules, 2017 by the Applicant No. 1, alleging profiteering by the Respondent in respect of purchase of Flat No. F1-203 in the Respondent’s project “Godrej-24”, Hinjewadi, Pune, Maharashtra-411057. The Applicant No. 1 had alleged that the Respondent had not passed on the benefit of input tax credit (ITC) to him by way of commensurate reduction in price on implementation of GST w.e.f. 01.07.2017, in terms of Section 171 (1) of the CGST Act, 2017. The DGAP has reported that the aforesaid reference was examined by the Standing Committee on Anti-profiteering, in its meeting held on 13.12.2018, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. On perusal of the said application, the DGAP has found that the Applicant No. 1 had booked a flat in the Respondent’s project “Godrej-24”, on 19.04.2017, i.e. in the pre-GST era. Further, the Applicant No. 1 had also submitted the copies of the cost sheets issued by the Respondent before and after implementation of the GST, booking form and statements of account along with his application.
2. The DGAP has intimated that a Notice under Rule 129 (3) of the above Rules was issued by him on 14.01.2019 on receipt of the said reference from the Standing Committee on Anti-profiteering, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC has not been passed on by him 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 supporting documents. The Respondent vide the above Notice, was given an opportunity to inspect the non-confidential evidences/information submitted by the Applicant No. 1 on 24.01.2019 or 25.01.2019, which was availed by him on 18.01.2019. The Applicant No. 1 vide e-mail dated 10.06.2019 was also afforded an opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 13.06.2019 or 14.06.2019, which the Applicant No. 1 had not availed of. The DGAP has also informed that the period covered by the current investigation was from 01.07.2017 to 31.12.2018 and the time limit to complete he investigation was extended upto 06.07.2019 by this Authority, vide its Order dated 19.03.2019, in terms of Rule 129 (6) of the above Rules.
3. The DGAP in his Report has also stated that the Respondent in response to the Notice dated 14.01.2019 has submitted his replies vide letters/e-mails dated 23.01.2019, 06.02.2019, 20.05.2019, 23.05.2019, 24.05.2019, 29.05.2019, 31.05.2019 and 21.06.2019, wherein he has submitted the following documents/information:
(a) Copies of GSTR-1 Returns for the period from July, 2017 to December, 2018.
(b) Copies of GSTR-3B Returns for the period from July, 2017 to December, 2018.
(c) Copy of TRAN-1 Statement.
(d) Copies of VAT & ST-3 Returns for the period from April, 2016 to June, 2017.
(e) Copies of all the demand letters, sale agreement/contract issued to the Applicant No. 1.
(f) Tax rates – pre-GST and post-GST.
(g) Copies of Balance Sheets for the FY 2016-17 & 2017-18.
(h) Copy of the Electronic Credit Ledger for the period from 01.07.2017 to 31.12.2018.
(i) CENVAT/ITC Register for the period from April, 2016 to December, 2018.
(j) Details of turnover, output tax liability/GST payable and the ITC availed.
(k) Copy of Project Report submitted to the RERA.
(l) List of home buyers of the project “Godrej-24”.
4. The Respondent has also submitted that he was developing the project in two phases — Phase-I, under the name of “Godrej-24” and Phase-II, by the name of “Godrej Elements”. He has further submitted that the”Godrej-24″ project was being developed in a joint development agreement with M/s R. R. Megacity Builders as the landowner and as per the agreement, a portion of the proceeds realized from the sale of flats, would be shared with the landowner on a revenue sharing basis.
5. The DGAP has also examined the above application, the replies of the Respondent and the documents/evidences on record and has found that the Applicant No. 1 was to follow the payment plan in respect of Flat No. F1-203 which he has purchased from the Respondent the details of which are given in Table-A below:-
Table-A
