Case Law Details
Sh. Deepak Naik Vs Prestige Estates Projects Ltd. (NAA)
Authority funds that the Respondent has gained the benefit of ITC on the supply of Construction Services after the implementation of GST w.e.f 01.07.2017 and the Respondent was required to pass on such benefit of ITC to the homebuyers/customers by way of commensurate reduction in prices in tents of Section 171 of the CGST Act, 2017. However, it is observed that the benefit was not commensurately passed on by the Respondent to his recipients.
The Authority finds that, taking into account the aforesaid Input Tax Credit availability post GST and the details of the amount collected from the home buyers during the period 01.07.2017 to 30.09.2019, the amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to Rs. 7,90,95,475/- (i.e. 7,06,20,959/- Rs. 84,74,515/- i.e. OST thereon) in respect of 452 homebuyers.
The Respondent has claimed that be had already passed on a substantial amount of GST ITC per the requirements of Section 171 of the CGST Act, 2017 to the homebuyers. The Respondent had submitted that he had passed on the benefit of Rs. 8,28,91,520/- to all the homebuyers/customers. The Respondent has also claimed that he has passed on excess ITC benefit to his buyers/customers. The DGAP has responded to such claims as tabulated at Table A above and fund that Respondent has not passed commensurate benefit to all homebuyers/customers. The Authority agrees with such verification report of the DGAP as such verification has been conducted in accordance with the directions of this Authority.
The Authority finds that, provisions of law i.e. Section 171 of the CGST Act, 2017 mentioned herein above provide that benefit of the ITC needs to be provided to each and every supply in the commensurate manner. As such, the excess of the ITC benefit provided to some of the homebuyers/customers cannot be offset against others to whom less ITC benefit has been provided or no benefit have been provided at all. The Authority finds that the verification as done by the DGAP in terms of this Authority’s Order No. 01/2021 dated 16.03.2021 does not substantiate the submissions and contentions of the Respondent that they have passed on the profiteered amount along with interest to each recipient of supply. The Authority finds that, the DGAP has made all efforts towards verification in terms of the said Order No. 01/2021 dated 16.032021 of the Authority, but, the Respondent was unable to provide the requisite evidence which was directed in the said Order. Hence, the Authority determines that the Respondent has profiteered an amount of Rs. 7,90,95,475/- (i.e. Rs. 7,06,20,959/- Rs. 84,74,515/- i.e. GST thereon). The details of all eligible homebuyers/customers and the amount of the benefit to be passed on to each of them is enclosed as the Annexure-A to this Order.
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