Sh. Parvez Khan Vs Pearlite Real Properties Pvt. Ltd. (NAA)
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 3.02% and during the post-GST period (July-2017 to December-2018), it was 6.66% for the project ‘Godrej 24’. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 3.64% [6.66% (-) 3.02%] 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. 6,89,62,698/- for the project “Godrej 24”, the details of which are mentioned in Table- B above. Further as per Table-C of DGAP, the profiteering amount to be passed on to the Applicant No. 1 is nil as no post-GST billing during the investigation period was made to Applicant No. 1.
Hence, in view of our findings above, the Authority finds no reason to differ from the above detailed computation of profiteered amount by the DGAP or the methodology adopted by it. The Authority determines that the Respondent has profiteered an amount of Rs. 6,89,62,698/- (Rupees Six Crore Eighty-nine Lacs Sixty-two Thousand Six Hundred Ninety-eight only) during the period under present investigation i.e. 1.07.2017 to 31.12.2018, in the present Project. 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 in the Project “Godrej 24” commensurate with the benefit of additional ITC received by him as detailed above.
The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 6,89,62,698/- for the project “Godrej 24”. 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 per the provisions of Rule 133 (3) (b) of the CGST Rules, 2017.
This Authority also orders that the profiteered amount of Rs. 6,89,62,698/- for the project “Godrej 24” along with the interest @ 18% from the date of receiving of the profiteered amount from the customers/flat buyers/recipients in the Project “Godrej 24”, till the date of passing the benefit of ITC shall be paid/passed on by the Respondent to each customer/flat buyer/recipient 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.
The details of the eligible customers/flat buyers/recipients in the Project “Godrej 24” and benefit which is required to be passed on to each customers/flat buyers/recipients along-with the details of the unit are contained in the Annexure ‘A’ of this Order.
As regards to point 13′ in para 7, the Authority finds that, in view of the discussions and findings above and in the given facts and circumstances and also stated position of law we find that the Respondent has denied the benefit of ITC to the customers/flat buyers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017. We hold that the Respondent has committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 31.12.2018, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 31.12.2018 when the Respondent has committed the above violation and hence the penalty under Section 171 (3A) can not be imposed on the Respondent for such period. Accordingly, notice for imposition of penalty is not required to be issued to the Respondent.
Further the concerned jurisdictional CGST/SGST Commissioner is also directed to ensure that the benefit of ITC as determined by the Authority as per the Annexure ‘A’ of this Order be passed on along with interest @18% to each homebuyer/recipient/customer, if not already passed on. In this regard an advertisement of appropriate size to be visible to the public may also be published in a minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of the builder (Respondent) — M/s Pearlite Real Properties Pvt. Ltd., Project- “Godrej 24”, Location- Pune, Maharashtra and profiteered amount Rs. 6,89,62,698/-; so that the Applicant along with Non-Applicants homebuyers/recipients/customers can claim the benefit of ITC which has not been passed on to them.
Homebuyers/recipients/customers may also be informed that this detailed NAA Order is available on Authority’s website www.naa.gov.in. Contact details of concerned Jurisdictional Commissioner CGST/SGST for compliance of this Authority’s order may also be advertised through the said advertisement.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The instant Report dated 25.02.2021 had been furnished by the Applicant No. 2, under Rule 133 (4) of the Central Goods & Services Tax Rules, 2017 in response to the Authority’s 10 No. 08/2020 dated 03.01.2020 which was passed to refer back to the DGAP’ s Report dated 28.06.2019 to reinvestigate the case.
2. Vide the Report dated 25.02.2021 the DGAP had inter-alia submitted the following points:-
I. Applicant No. 1 vide his application dated 15.10.2018 filed before the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017, had alleged profiteering by the Respondent in respect of purchase of Flat in the ” Godrej 24″ project of the Respondent.
II. A Notice under Rule 129 of the CGST Rules, 2017 was issued by the DGAP on 14.01.2019 calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 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 furnish all supporting documents.
III. The period of investigation was from 01.07.2017 to 31.12.2018.
IV. As per the directions of the Authority issued vide Internal Order No. 08/2020 dated 03.01.2020, the DGAP initiated a re-investigation of the case. The case had been reinvestigated on the basis of new data submitted by the Respondent. The main issues/ Paras raised by the Authority vide Internal Order No. 08/2020 and ensuing DGAP findings were as follows:-
a) Para 71 “It is further revealed from the record that the Respondent had claimed that the carpet area relevant to turnover considered by the DGAP was incorrect.
He had also supplied both the figures which had been claimed to be correct by him as well as those which had been considered by the DGAP in Table B of this Report dated 26.06.2019 as under: –
