Case Law Details
Sh. Dhiraj Shetty Vs Bhagwati Infra (NAA)
The brief facts of the present case, are that a reference was received by the DGAP from the Standing Committee on Anti-profiteering on 09.10.2019 to conduct a detailed investigation in respect of an application filed under Rule 128 of the Central Goods and Services Tax Rules, 2017 alleging profiteering by the Respondent in respect of purchase of a flat in the Respondent’s project ‘Bhagwati Eminence’, situated at Plot 7/7A, Sector-13, Nerul, Navi Mumbai. The Applicant No. 1 alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction in price against payments due to him. The Applicant No. 1 also stated that on raising concern to the Respondent, he was informed that already a discount of 3% had been given to him on the 12% GST and remaining 4% of the ITC will be used by the promoters without passing it on to the customers on the reasoning that GST ITC refunds process was unclear, complex and uncertain. Further, on being asked about who keeps the remaining part of ITC after the 3% discount given to the customer from the 12% GST, the Applicant No. 1 received the following reply vide email dated 06.07.2019 which reads as “Before 31/03/2019 builder has already paid 12% on the due amount so obviously the amount goes to the government tax.”
NAA determines that the Respondent has realized an additional amount of Rs. 1,56,77,149/- which includes both the profiteered amount @ 2.44% of the taxable amount (base price) and GST @ 12% on the said profiteered amount from the 71 home buyers/shop buyers/ recipients of supply including Applicant No. 1 during the period from 01.07.2017 to 30.09.2019 which was required to be passed on the eligible home buyers of his impugned project. The details of eligible home buyers/shop buyers/ recipients of supply to whom supply has been made by Respondent in the impugned Project and from whom additional amount on account of benefit of ITC had been realized by the Respondent during the aforesaid period along with details of such additional amount is given in Annexure-`A’ to this Order. Since, all the home buyers/shop buyers/ recipients of supply are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on the profiteered amount along with the interest @ 18% per annum (from the dates from which the said profiteered amount was collected by him from each of them till the date such amount is passed on/returned/refunded), if not already passed on/returned/refunded, within a period of 3 months from the date of passing of this Order as per the details mentioned in Annexure-`A’, failing which the said amounts shall be recovered as per the provisions of the CGST Act, 2017.
Accordingly, this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondents shall reduce the prices to be realized from the home buyers/shop buyers/ recipients of supply in the above Project commensurate with the benefit of ITC received by him as detailed above.
This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Mumbai, Maharashtra to monitor compliance of this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as determined by the Authority, is passed on to all the eligible home buyers/shop buyers/ recipients of supply. It may be ensured that the benefit of ITC is passed on to each home buyer/shop buyer/ recipient of supply as per Annexure-A attached with this Order along with interest @18% as prescribed. In this regard an advertisement of appropriate size to be visible to the public may also be published in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of Respondent M/s Bhagwati Infra, 1306, Real Tech Park, Plot No. 39/2, Sector- 30A, opp. Vashi Railway Station, Vashi, Navi Mumbai- 400 705, for their Project “Bhagwati Eminence”, situated at Plot 7/7A, Sector-13, Nerul, Navi Mumbai and amount of profiteering Rs. 1,56,77,149/- , so that his concerned home buyers/shop buyers/ recipients of supply can claim the benefit of ITC if not passed on. Home buyers/shop buyers/ recipients of supply may also be informed that the detailed NAA Order is available on Authority’s website www.naa. gov.in.
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