Case Law Details
Parveen Kumar Bansal Vs Sternal Buildcon Pvt. Ltd. (NAA)
We have carefully considered the Report furnished by the DGAP, the submissions made by the Respondent and the other material placed on record. On examining the various submissions, the observations of this Authority are as follows:-
a) The DGAP, in Para 16 of his report, has stated that the Respondent had entered into an agreement with the Contractor for the construction of Residential Units, on 31.08.2017 and the construction activities commenced on 10.09.2017 and the draw of the flats was held on 18.09.2017. Therefore, the DGAP has concluded that the Residential project i.e. The Serenas’ of the Respondent was launched in the post-GST regime and there was no price history of the residential units sold in the pre-GST regime which could be compared with the post-GST base price to establish whether there was any profiteering by the Respondent or not. However, as per the heading ‘Other Current Liabilities’ under Note 6 of the Annual Financial Statement of the Respondent for the period 2016-17, it is observed that the Respondent has received an amount of Rs. 16,77,22,611/- as ‘Security from Applicants(d)’ which is explained as “(d) During the Financial Year, the Company has launched “Affordable Housing Project” by the name & style of “SERENAS” under the Affordable Housing Scheme by Haryana Urban Development Authority Limited. The flats shall be allotted to the applicants by way of a draw of lots which is yet to happen as on 31st March 2017 & pending the same, the application money received has been shown as Security from Applicants.” Given the above, it is clear that the Respondent has received the above mentioned ‘Security Amount’ in the pre-GST period and that it relates to the residential units of ‘The Serenas’. Hence, the finding of the DGAP that there wasn’t any price history of his residential units in the pre-GST period needs to be revisited since this Authority is of the view that the above-said security amount received from the applicants merits to be incorporated in the pre-GST turnover while computing the quantum of profiteering.
b) Further, this Authority observes that the two projects, namely ‘The Serenas’ (comprising residential units) and `Signum 36′ (comprising commercial units) have been developed and executed by the Respondent under a single GST registration on the same plot of land having common facilities and common areas. Further, the ITC paid is also common for the commercial and the residential area of the projects. Further, it is observed that the Respondent has also been maintaining a common Input Tax Credit Ledger and other connected records for the residential and commercial units of The Serenas’ and `Signum 36′. Therefore, these two projects deserve to be considered as an integrated project comprising both, residential and commercial units for the purpose of computation of profiteering in terms of Section 171 of the CGST Act, 2017.
c) Needless to state that while computing the quantum of profiteering in the instant case, the amounts received as `Security Amount’ in respect of ‘the Serenas’ and the `Advance Token Money’ in respect of `Signum 36′ shall be appropriately factored in the computation.
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