Sudhir Kumar Jain Vs DLF Limited (NAA)
The Applicant No. 1 has contended that the Respondent has wrongly charged GST @18% on the PLC on the sale of flat to him after issue of Completion Certificate. In this regard, it is pertinent to mention that as per the provisions of Section 171 of the CGST Act, 2017 read with Rule 127 and 133 of the CGST Rules, 2017, this Authority has only been mandated to ensure that both the benefits of tax rate reduction and ITC are passed on to the customers. Therefore, this Authority has no mandate to look into the matter whether the Respondent has wrongly charged GST from the Applicant No. 1 on the PLC. Therefore, the Applicant No. 1 may take up the matter with the jurisdictional CGST/ SGST Authorities to settle his above grievance.
It is also apparent from the perusal of Table-`B’ supra that the DGAP has calculated the ratio of CENVAT Credit to turnover as 26.85% for the pre-GST period w.e.f. 01.04.2016 to 30.06.2017 and ratio of ITC to turnover for the post-GST period from 01.07.2017 to 31.07.2019 as 26.14%. It is also revealed from the above Report of the DGAP that the Respondent has received the Completion Certificate on 17.07.2017 in respect of the above project. Since, the Respondent has received the Completion Certificate on 17.07.2017, the period of investigation should have been restricted up to 16.07.2017 and the investigation should not have been conducted up to 31.07.2019 unless there were justifiable grounds to do so. However, no such grounds have been mentioned by the DGAP in his Report.
It is also evident from Table-B supra that the DGAP while computing the ratio of ITC to turnover for the post-GST regime has considered the ITC availed by the Respondent for the period from 01.07.2017 to 31.07.2019. Since, the Completion Certificate was received by the Respondent on 17.07.2017, the amount of ITC availed/available to the Respondent in the post-GST regime should have been considered up to 16.07.2019 and not up to 31.07.2019.
Based on the above grounds the ratio of ITC to turnover for the period w.e.f. 01.07.2017 to 31.07.2019 for the post-GST period computed by the DGAP cannot be relied upon. Accordingly, the ratio of ITC to turnover w.e.f. 01.07.2017 to 16.07.2019 for the post GST period is required to be recomputed by the DGAP. In case it is to be computed up to 31.07.2019 the grounds thereof are required to be mentioned.
It has also been observed from the submissions of the Respondent that he is executing another project viz. “The Ultima” in the s m “DLF Garden City”, situated in Gurugram, Haryana in respect of which the DGAP has not conducted any investigation to ascertain whether the Respondent is liable to pass on the benefit of ITC to the recipients of this project or not. Since the execution of the above project has been admitted by the Respondent himself therefore, there are sufficient reasons to believe that the Respondent is apparently liable to pass on the above benefit as per the provisions of Section 171 (1). Further, the Respondent also has a single GST registration and is maintaining a joint ITC Register and is availing ITC on all the projects which he is executing from a common pool of ITC, to discharge his GST output liability on these projects through the combined GSTR-3B Returns. Therefore, all the projects on which the Respondent is availing ITC from the common pool are required to be investigated to determine whether he has passed on the benefit of ITC to the buyers of each project, which are being executed by him. Accordingly, this Authority as per the provisions of Section 171 (2) of the above Act after taking suo moto cognizance, directs the DGAP to conduct investigation in respect of the above project and submit Report to this Authority for determination whether the Respondent is liable to pass on the benefit of ITC in respect of the above project to the buyers or not as per the provisions of Section 171 (1) of the above Act.
Due to the above reasons the Report dated 31.08.2020 furnished by the DGAP cannot be accepted. Therefore, in terms of the provisions of Rule 133 (4) and Section 171 (2) of the CGST Act, 2017 the DGAP is directed to further investigate the present case on the above issues and submit his Report under Rule 129 (6) of the above Rules.
