Abha Tiwari Vs Samridhi Realty Homes Pvt. Ltd. (NAA)
This Authority has carefully considered the Report filed by the DGAP, all the submissions and the documents placed on record and the arguments advanced by the Respondent and the submissions of the Applicants on record. On examining the various submissions, the observations of this Authority are as follows
i. The Respondent vide his submissions dated 26.04.2022 has argued that the DGAP had not allowed the ITC of VAT in the pre-GST regime calculations, which has resulted into inflated ITC benefit amount, despite the fact that he had availed ITC on VAT of Rs 2,63,09,785/-during the period from April 2017 to June 2017, which was evidenced by his statutory VAT records and that the same should be factored in the pre-GST regime.
ii. With respect to the above contention of the Respondent, the DGAP has clarified that during the course of investigation, copies of Assessment Orders for the period from April 2016 to June 2017 issued by the VAT Authorities had not been placed before him and thus the said issue was not addressed in the DGAP’s Report.
iii. Now that the said records have been produced by the Respondent before this Authority, it is imperative that the facts in these records/documents be duly incorporated in the Report of the DGAP. Thus we take the view that this case merits to be revisited by the DGAP so that all the facts and records are considered. Accordingly, the Respondent is directed to submit all the facts and records before the DGAP within 15 days from the receipt of this Order.
Therefore, without going into the merits and the other submissions made by the Respondent and the Applicants at this stage, we find this case that merits to be reinvestigated by the DGAP based on the above observations of this Authority. Thus, we direct the DGAP to reinvestigate the matter as per the provisions of Rule 133(4) of the CGST Rules 2017 and submit his report before this Authority.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The Present Report dated 30.03.2021 had been furnished by the Director General of Anti-Profiteering (DGAP) under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of this case are that a complaint was filed by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of Flat no. C-302 in the Respondent’s project “Samridhi Grand Avenue”, situated at Plot No. GHO9D, Techzone 4, Greater Noida West, Uttar Pradesh- 201306. The Applicant No. 1 has alleged that the Respondent had not passed on the benefit of ITC to her by way of commensurate reduction in price despite having charged GST @12°/0 on the remaining payments due to him.
2. The DGAP has reported that the Applicant No. 1 had booked an under-construction Flat in May, 2017 and paid 40% of the Basic price under the Service Tax regime and 60% of the Basic price under GST regime. The Respondent had charged 12% GST rate on the Basic Sale Price at the time of offer of possession of the Flat in March, 2019 but did not pass on the benefit of ITC to her. In support of her Application, the Applicant No. 1 submitted copy of Statement of Account in respect of her flat along with her Application.
3. In his Report, the DGAP has reported that on receipt of the reference from the Standing Committee on Anti- profiteering on 03.06.2020, a Notice under Rule 129 of the Rules was issued by the DGAP on 26.06.2020, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on by him 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 the relevant documents in support of his reply.
4. Further, vide DGAP’s e-mail dated 15.02.2021, the Applicant No. 1 was also requested to confirm the receipt of benefit of ITC passed on by the Respondent. In response, the Applicant No. 1 vide e-mail dated 21.02.2021 confirmed that the Respondent has passed on the benefit of ITC amounting to Rs. 6.335/- to her.
5. The DGAP has reported that the period covered by the current investigation was from 01.07.2017 to 31.05.2020 as the reference from the Standing Committee was received on 03.06.2020 and the Respondent had not received Occupancy Certificates (hereinafter referred to as ’00’) for all the towers in the project as on 31.05.2020. Further, the statutory time limit to complete the investigation was 02.12.2020 which stood extended up to 31.03.2021 by virtue of Govt. of India Notification No. 35/2020-Central Tax dated 03.04.2020, Notification No. 55/2020-Central Tax dated 27.06.2020, Notification No. 65/2020-Central Tax dated 01.09.2020 and Notification No. 91/2020-Central Tax dated 14.12.2020 issued by Central Government under Section 168A of the CGST Act, 2017 where, “any time limit for completion or compliance of any action, by any authority, had been specified in. or prescribed or notified under Section 171 of the said Act, which falls during the period from the 20th day of March, 2020 to the 30th day of March, 2021, and where completion or compliance of such action had not been made within such time, then, the time-limit for completion or compliance of such action, shall be extended up to the 31st day of March. 2021.”
6. The DGAP has reported that the Respondent replied to the said Notice vide his various letters/e-mails but did not furnish the complete and relevant documents required for investigation. Hence, 2 Summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules, were issued on 15.01.2021 & 23.02 2021 to Sh. Pawan Kumar Aggarwal. Director of M/s. Samridhi Realty Homes Private Limited, asking him to submit the relevant documents to the DGAP by Speed Post/Courier or through e-mail on or before 22.01.2021 & 01.03.2021 respectively. In response to the Summons. the Respondent submitted certain documents vide his e-mail dated 20.01.2021 and 01.03.2021. Thus, in response to the Notice dated 26.06.2020 and various reminders and Summons, the Respondent vide letters/e-mail dated 17.07.2020, 30.07.2020, 20.08 2020, 25.09.2020, 09.10.2020, 22.10.2020, 11.11.2020. 18.12.2020, 05.01.2021, 20.01.2021, 29.01.2021, 31 01.2021, 19.02.2021, 01.03.2021, 02.03.2021, 08.03.2021, 17.03.2021 and 23.03.2021 inter-alia stated:-
(a) That he was a real estate developer, engaged in the construction of residential flats under the project name “Samridhi Grand Avenue” and he had only a single construction site.
(b) That w.e.f. 01.04.2019, he had not opted to pay taxes under new GST rate scheme i.e. 5% GST without ITC with effect from 01.04.2019 in terms of Notification No. 03/2019- Central Tax (Rate) and had continued to pay tax at the existing 12% GST rate with full benefit of ITC.
7. The DGAP has further reported that the aforementioned letters/e-mails, the Respondent has submitted the following documents/ information:
(a) Copies of GSTR-1 Returns for the period July, 2017 to May. 2020.
(b) Copies of GSTR-3B Returns for the period July, 2017 to May, 2020
(c) Copies of GSTR-9 & 9C for the FY 2017-18
(d) Copies of ST-3 and VAT Returns for the period April, 2016 to June, 2017
(e) Copy of Tran-1 for the period July, 2017 to December, 2017.
(f) Tax rates – pre-GST and post-GST.
(g) Copy of audited Balance sheet for FY 2016-17, 201718 & 2018- 19 along with form 3CD.
(h) Copies of Sale agreement/Contract. all Demand Letters, Statement of Accounts and Possession Letter issued to the Applicant No. 1 along with sample copies for 165 other home buyers.
(i) Copy of Electronic Credit Ledger for the period July, 2017 to March. 2020.
(j) Declaration in Annexure-IV to the Notification No. 3/2019-CT (Rate) dated 29.03.2019 for opting old scheme of paying GST.
(k) CENVAT/ ITC register for the period April, 2016 to May, 2020.
(I) Details of VAT Service Tax and GST turnover, output tax liability payable and ITC availed for the project “Samridhi Grand Avenue”.
(m) Copy of RERA registration Certificate along with Project Report submitted to RERA.
(n) Copy of Sub-Lease Deed dated 17.06.2013 for purchase of land from M/s. Amrapali Dream Valley Pvt. Ltd.
(o) Status of the Project “Samridhi Grand Avenue” as on 30.11.2019 in terms of Tower-wise sold and unsold Units along with copies of Occupancy Certificates.
(p) List of home buyers & commercial shop buyers in the project “Samridhi Grand Avenue” along with details of benefit passed on to the buyers.
(q) Sample Copies of receipts and breakup of Cost of units vide which benefit claimed to be passed on to the customers.
8. The DGAP has further reported that the Respondent had requested to consider all the documents/information submitted as confidential in terms of Rule 130 of the CGST Rules, 2017 except )`: the information and documents related with the concerned buyers.
9. It has also been mentioned by the DGAP that the reference received from the Standing Committee on Anti- profiteering, the various replies of the Respondent and the documents/evidences on record had been carefully scrutinized and it was found that the main issues for determination in the case were:-
(i) Whether there was benefit of reduction in the rate of tax or ITC on the supply of construction service by the Noticee, on implementation of GST w.e.f. 01.07.2017 and if so.
(ii) Whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the CGST Act, 2017.
10. The DGAP has reported that the Respondent, vide his e-mail dated 05.01.2021 submitted copies of demand letters, payment receipts and sale agreement for the sale of Flat No. 302, Tower-C. pertaining to the Applicant No. 1 which measured 1080 square feet and had been sold at a base price of Rs. 36,67,460/-. The schedule of payment of the Applicant No. 1 has been furnished by the DGAP in Table-A while other charges applied to the case of the Applicant No. 1 are at Table-6 of his Report:-
Table-‘A (Amount in Rs.)
