Case Law Details
Amit Tandon Vs Adani M2k Project LLP (National Anti-Profiteering Authority)
It is clear from the plain reading of Section 171 (1) mentioned above that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP’s Report that there has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue, we observe from the DGAP Report 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 5.57%, whereas, during the post-GST period (July-2017 to December-2018), it was 7.08%. This confirms that in the post-GST period, the Respondent has been benefited from additional ITC to the tune of 1.51% (7.08%-5.57%) of his turnover and the same is required to be passed on by him to the eligible flat buyers, including the Applicant No. 1. We observe that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible flat buyers works out to Rs.1,25 33,555/-. We also observe that the said computation of the amount of profiteering worked out by the DGAP is based on the data and information supplied by the Respondent himself. We also take note of the fact that the Respondent has not challenged the said mathematical computation and has agreed to pass on the ITC benefit to the recipients. Hence we observe that the amount of profiteering computed by the DGAP is correct and therefore, we take the view that the provisions of Section 171(1) of the CGST Act. 2017 have been contravened in the present case as the Respondent had been benefited from additional ITC in the post-GST regime.
Further, it has been revealed from the record that the Respondent has profiteered an amount of Rs. 1,25,33,555/- for the period of investigation. Therefore, in view of the above facts, this Authority, under Rule 133 (3) (a) of the CGST Rules, 2017, orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. The above amount of Rs. 1,25,33,555/- which includes 12% GST on the base profiteered amount of Rs.1,11,90,675/-, has been profiteered by the Respondent from the Applicant No. 1 and other flat buyers which is required to be refunded to the Applicant No. 1 and other flat buyers along with interest @18% from the date when the above amount was profiteered by him till the date of payment as per the provisions of Rule 133 (3) (b) of the above Rules. It is pertinent that the above amount of profiteering includes an amount of Rs. 1,46,656/-including GST @12% on the base amount of Rs. 1,30,943/- which has been profiteered by the Respondent from the Applicant No. 1. The Respondent is also liable to pass on the benefit to the other eligible home buyers as detailed by the DGAP in Annexure-12 of the Report. Therefore, the Respondent is directed to pay the profiteered amount of Rs. 1,25,33,555/- as also the interest applicable thereon to the eligible home buyers including the Applicant No. 1, as detailed at Annexure-12 of the report of the DGAP.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 19.06.2019, received on 20.06.2019 has been furnished by the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the present case are that a complaint dated 30.08.2018 was filed before the Haryana State Screening Committee on Anti-Profiteering by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of Flat No. B-501 in the Respondent’s project “Oyster Grande” situated in Sector-102/102A, Gurugram, Haryana. 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 the price. This Complaint was examined by the Haryana State Screening Committee and it was observed that due to availability of ITC on input materials, the Respondent’s tax burden had been reduced which needed to be passed on to the customers, in terms of Section 171 of the CGST Act, 2017. The State Screening Committee forwarded the said application with its recommendation to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the CGST Rules, 2017.
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