Case Law Details
Sh. Arbind Biswal Vs Sahej Realcon Pvt. Ltd. (NAA)
It is apparent from the DGAP’s Report and the available record that the Completion Certificate for the project Sahej Valley was issued on 31.03.2016, i.e. prior to the date of introduction of GST through which the provisions of Anti-Profiteering were introduced. In support of the claim. the Respondent has also produced a copy of sale deed for other units sold post completion in October, 2017, to establish that the project was completed in March, 2016 and that no Service Tax/GST was charged on such units sold post completion. Since, the Completion Certificate was obtained for the subject project before the introduction of GST and also there has not been any reduction of GST rate in the instant case, the provisions of Section 171 dealing with Anti-profiteering cannot be made applicable to the said project in the view of the fact that there was no additional ITC which had been utilized by the Respondent, which was relevant for establishing allegation of profiteering. Further, no fresh demand has been raised by the Respondent upon Applicant No.1 in the post-GST regime, only a reminder for previous demand was issued. Launching of the project, Agreement to sell and Completion Certificate of the project had taken place in the pre-GST regime and hence, there was no post-GST tax rate or ITC structure which could be compared with the pre-GST tax rate and ITC and also the anti-profiteering provisions related to Section 171 were not in existence at that time. Accordingly. it is clear that the Respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period and therefore it does not qualify to be a case of profiteering.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 30.12.2020 has been received in this Authority from the Applicant No. 2 i.e. the Director General of Anti-Profiteering Authority (DGAP) in response to the Authority’s 10 no. 13/2020 dated 19.03.2020 passed under Rule 133(4) of the Central Goods & Service Tax (CGST) Rules, 2017. The said order was passed to remand the DGAP’s Report dated 20.09.2019 which was furnished by the DGAP after investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that the Applicant No. 1 had filed an application dated 07.01.2019 under Rule 128 of the CGST Rules and alleged profiteering by the Respondent while he had purchased Duplex Row House-B3 in the Respondent’s project “Sahej Valley”, situated at Dandipalli, Rourkela. The Applicant No. 1 had also alleged that the Respondent had not passed on the benefit of ITC although he had charged GST @12% w.e.f. 01.07.2017 from the said Applicant. This application was forwarded to the Odisha State Screening Committee on Anti-Profiteering on 05.02.2019 and was considered by the Standing Committee on Anti-Profiteering in its meeting held on 11.03.2019, wherein, the Standing Committee referred the complaint to the DGAP for conducting detailed investigation on the allegations levelled by the Applicant No. 1.
2. The said application was examined by the Director General of Anti-Profiteering and the .Investigation Report dated 20.09.2019 under Rule 129(6) of the Rules, was furnished to this Authority. Vide the said Report, it was concluded by the DGAP that the construction service was completed well before the introduction of GST, and any liability of GST of the Applicant No. 1 was only on account of the dues left on account of his booking of the unit prior to issue of Completion Certificate. The DGAP further reported that there was no additional accrual of Input Tax Credit to the Respondent as a result of introduction of GST as the construction service was completed prior to introduction of GST. In support of the said claim, the DGAP had emphasized on the Completion Certificate dated 31.03.2016, submitted by the Respondent to the DGAP. The DGAP also stated that the project had 14 flats, each with 1700 sq. ft. of super built up area, and out of the total, only two units were sold before completion, one of which was allotted to the Applicant No. 1. The DGAP, in his Report dated 20.09.2019, had established that the Applicant No. 1 had booked the Unit in the project on 23.10.2014, Agreement to sell was executed on 24.04.2016, and the tri-partite agreement between the Applicant No. 1, the Respondent and ICICI Bank, financer for the Applicant No. 1 was signed on 17.05.2016. Thus, the conclusion was that the provision of Section 171(1) of the CGST Act, 2017 had not been contravened.
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