Applicant alleged that Pareena Infrastructure Pvt. Ltd not passed benefit or input Tax credit (ITC) to by way of commensurate reduction in price of flat for project ‘Laxmi Apartment.
The Standing Committee on Anti-profiteering, referred on application filed by Shri Saurabh Kumar, Infinity. Tower-B, 4th Floor, DLF Cyber CRY, Phase-11. Sector-25A, Gurugram-12/2002 to Direcor General of Anti-Profiteering (DGAP) alleging profiteering by M/s Patterns Infrastructure Pvt Ltd., C-7A, 2nd Floor, Omax City Centre Mall, Sohna Road, Sector-49, Gurugram, Haryana-122 002 in respect of purchase of flat in project ‘Laxmi Apartment’ Sector-99A, Dwarka Expressway, Gurugram, Haryana. The Applicant alleged that the Respondent had not passed on the benefit or input Tax credit (ITC) to him by way of commensurate reduction in the price of flat.
It is clear front it plain reading of Section 171 (1) 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 arty net benefit of ITC with the introduction of GST. On this issue it has been revealed from the DGAP’ s 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 1.61% and during the post-GST period (july-2017 to October-2020), it was 9.88% for the project “Laximi Apartment”, This confirms that, post-GST the Respondent has been benefited from additional ITC to the tune of 8.27% [9.88% (-) 1.61%] of his turnover for the said project and the same was required to be passed on to the customers/flat buyers/recipients. The DGAP has calculated the amount of ITC benefit to be passed on to the customers flat buyers/recipients as Rs. 6,33,70,091/- (which includes an amount of Rs. 57,557/- in relation to Applicant no. 1) for the project “Laxmi Apartments”, the details of which are mentioned in Table- B above.
Hence, the Authority finds nu reason to differ from the above detailed computation of profiteering amount by the DGAP or the methodology adopted by it. The Authority finds that, the Respondent has profiteered an amount of Rs. 6,33,70,091/- (Rupees Six Crore Thirty Three Lacs Seventy Thousand Ninety One only) during the period under present investigation. This includes an amount of Rs. 57,571/- in relation to Applicant no. 1. Therefore, given the above facts, the Authority under Rule 133(3)(a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from, the customers flat buyers/recipients commensurate with the benefit of additional ITC received by him.
The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 6,13,70,091/- for the project “Laxmi Apartment”. Hence the Respondent is directed to also pass on interest @18% to the customers/flat buyers/recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/payment, as par the provisions of Rule 133 (3) (b) of the CGST Rules, 2017.
This Authority akin orders that the profiteering amount of Rs. 6,33,70,091/- for the project “Laxmi Apartments” along with the interest @18% from the date of receiving of the profiteered amount from the customers/flat buyers/recipients till the date of passing the benefit of ITC shall be paid/passed on by the Respondent within a Period of 3 months from the date of this Order failing which it shall be recovered as per the provisions of the CGST Act, 2017.