Case Law Details
Manju Bala Vs SJP Hotel and Resorts Pvt. Ltd. (NAA)
The only plea of the Respondent before this Authority is that he has passed on the benefit of ITC amounting to Rs 9,77,49,000/- to all his customers and has submitted sample acknowledgement receipts claimed to have been received from the customers vide which, according to the Respondent, the customers have acknowledged that they had received the benefit of ITC from the Respondent In this regard, this Authority finds that with respect to the above claim and contention of the Respondent, the DGAP was directed to verify whether the Respondent has passed on the benefit of ITC to the 51 customers as per the list provided by him or not. The DGAP gave ample opportunities to the Respondent to submit the details as required by the DGAP so that the above claim of the Respondent can be verified at least for such homebuyers/customers on a sample basis However, the Respondent has not submitted the requisite documents/information before the DGAP. Further, during the course of nearing the Applicants have also submitted that the acknowledgement receipts submitted by the Respondent before this Authority are fake and the signatures of the recipients are forged. Further. upon perusal of the submissions filed by the Respondent. it is revealed that the Respondent has not submitted all the purported acknowledgement receipts received from each and every customer/flat buyer Ito whom ITC benefit is claimed to have been passed on) stating that they have received the benefit of ITC from the Respondent Hence, the claim of the Respondent that he has passed on the benefit of ITC to all his customers is not substantiated by any verifiable record so as to determine the veracity of such claim Hence, such claim of the Respondent needs proper and in depth verification by way of receipt of acknowledgement’s from each and every customer that they have received the benefit of ITC from the Respondent and verification of the It authenticity of such documents. This is especially necessary as the Applicants have unequivocally alleged that signatures have been forged and sample receipts are fake Hence in the absence of authentic acknowledgment receipts/ verifiable evidence/ documents from the customers/flat buyers, the Authority finds that it cannot be accepted that the Respondent has passed on the benefit of ITC to his homebuyers/customers/recipients
Further, all the Applicants have submitted that they have not received the benefit of ITC from the Respondent (as has been claimed by him) and the acknowledgement receipts submitted by the Respondent are fake and the signatures of the flat buyers/customers on the acknowledgement receipts are forged by the Respondent. With respect to the above contention of the Applicants. It would be relevant to mention that the mandate of this Authority lies within the provisions of Section 171 of the CGST Act, 2017 This Authority has only been mandated to investigate whether both the benefits of tax reduction and ITC have been passed on the to the consumers or not Hence, any other such issue/allegation as raised by the Applicants, which is not related to profiteering, cannot he entertained by the Authority. Therefore, the Applicants may approach the appropriate Authority with respect to the issues which are not related to determination of the profiteered amount
Hence, this Authority finds that. it is established from the above fads that the Respondent has benefited from the additional ITC to the extent of 4 25% of the turnover during the period from July 2017 to December 2019 and hence the provisions of Section 171 of the CGST Act. 2017 have been contravened by the Respondent as he has not passed on the benefit of such additional ITC to his customers Thus this Authority determines the profiteered amount as Rs. 6,87,58,6861-(inclusive of GST @ 12% or 8% as applicable) in terms of Rule 133 (1) of the CGST Rules. 2017 [This amount is inclusive of profiteered amount. if any, in respect of the Applicant no. s 1 to 12) The above amount that has been profiteered by the Respondent from his home buyers shall be refunded/returned/passed on by him, if not already passed on, along with interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment, in accordance with the provisions of Rule 133 (3) (b) of the GCST Rules 2017.
This Authority under Rule 133 (3) (a) of the CGST Rules. 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the Units commensurate with the benefit of ITC received by him as has been detailed above
The Respondent is also liable to pay interest as applicable on the entire amount profiteered. i.e. Rs. 6,87,58 685/-. Hence the Respondent }s directed to also pass on interest @18% to the homebuyers/customers/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.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 28.01.2021 has been received from the Applicant No 13 i.e. the Director-General of Anti-Profiteenng IDGAP) after a detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules. 2017 The brief facts of the case are that the Standing Committee on Anti-profiteering. received an Application under Rule 128 of the CGST Rules, 2017 filed by the Applicant No. 1 & 2 alleging profiteering in respect of construction service supplied by the Respondent The above Applicants had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) availed by him by way of commensurate reduction in the price of Unit No. SUN 3.2301 & SUN 1-2403, purchased by the Applicant No 1 & No 2 respectively, from the Respondent in his project ‘Migsun Wynn’, situated at Greater Noida. Uttar Pardesh in terms of Section 171 of the Central Goods and Services Tax Act, 2017
2 Vide me above Report, the findings of the DGAP are as under a The aforesaid applications were examined by the Standing
a. Committee on Anti-profiteering, in its meeting held on 10.01 2020 and on being prime facie satisfied forwarded the same to the DGAP to conduct a detailed investigation Into the allegation made in the complaint according to Rule 129 (11 of the CGST Rules, 2017.
b. The Applicant No 3 has also filed an application dated 31.01.2019 to the Standing Committee on Anti-profiteering and the complaint was forwarded to the DGAP with directions to tag the same with the ongoing investigation
c On receipt of the recommendation from the Standing Committee on Anti-profiteering. the DGAP had issued a Notice dated 29.01,2020 under Rule 129 (3) of the above Rules, asking the Respondent to intimate as to whether he admitted that the benefit of ITC had not been passed on to the above Applicants by way of commensurate reduction in the price of the flats and in case it was so, to suo-moto compute the quantum of the same and mention it in his reply to the Notice along with the supporting documents
d The DGAP has covered the period from 01 07.2017 to 31 12.2019 during the current investigation The time limit to complete the investigation was 23.07 2020 However in terms of Notification 35/2020-Central Tax dated 03.04.2020 read with Notification 55/2020-Central Tax dated 27.06.2020, Notification No.65/2020- Central Tax dated 01.09.2020 and Notification No. 91/2020 dated 14.12.2020 where, any time limit for completion/furnishing of any report, has teen specified in, or prescribed or notified under thee Central Goods and Service Act. 2017 which falls during the period from the 20th day of March. 2020 to the 30th day of March. 2021. and where completion or compliance of such action has not been mace within such time. then, the time limit for completion or compliance of such, action was extended upto 31.03.2021
e In response to the Notice issued by the DGAP, the Respondent submitted his submissions/replies vide his letters/email& dated 10.02.2020 27.02.2020, 19.06 2020 and 19.01 2021 and submitted the following documents/information to the DGAP:-
i. Brief Profile of the Respondent
ii. Copies of GSTR-1 Returns for the period July 2017 to December, 2019.
iii. Copies of GSTR-3B Returns for the period July, 2017 to December, 2019
iv. Electronic Credit Ledger for the period July. 2017 to December. 2019
v. Copy of GSTR-9 Return for the period 2017-18
vi Copy of TRAN•1 for the relevant period vii. Copies of VAT Returns (including ail annexures) and Service Tax Returns for the period April. 2016 to June, 2017
vii. Balance Sheet (including all Annexures and profit/loss account) for the FY 2016-17. 2017-18 3 2018-19
ix. Cenvat/ITC Register for the FY 2016-17. 2017-18, 201819 and for the period April, 2019 to December, 2019.
x. Details of Applicable tax rates, Pre-GST and Post-GST
xi. Copy of returns submitted to RERA
xii. Details of VAT, Service Tax. ITC of VAT. CENVAT credit for the period April, 2016 to June, 2017 and output GST and ITC of GST for the period July. 2017 to December, 2019 for the project “Migsun Wynn” in the given format.
xiii. List of home buyers in the project “Migsun Wynn”
f The Respondent has requested to treat all the information and documents supplied by him as confidential under Rule 130 of the CGST Rules. 2017.
g. The DGAP has also stated that all the documents placed on record were carefully examined by him and it was fauna that the main issues for determination were whether there was a reduction in the rate of tax or benefit of ITC on the supply of construction service by the Respondent after implementation of the GST w e.f 01 07.2017 and in case it was so, whether the Respondent had passed on the above berefits to the home buyers as per the provisions of Section 171 of the CGST Act, 2017 or not
h The DGAP has further stated that para 5 of Schedule-Ill of the Central Goods and Services Tax Act, 2017. defining activities or transactions which shall be treated neither as a supply of goods nor a supply of services, reads as “Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building’ Further, Clause (b) of para 5 of Schedule II of the Central Goods and Services Tax Act. 2017 reads as –1o) construction of a complex, building, civil structure or a part thereof. including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has peen received after issuance of the completion certificate. where required, by the competent authority or after its first occupation, whichever is earlier’ In the light of these provisions, the DGAP has contended that the ITC of the units which were under construction but not solo was provisional ITC that may be required to be reversed by the Respondent, if such units would remain unsold at the time of issue of Completion Certificate (CC), in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act 2017 which read as under:-
17 (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under tins Act or under the integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies
17 (3) The value of exempt supply under subsection (2) shall be such as may be prescribed and shall include supplies on which the recipient is liable to pay tax on reverse charge basis. transactions in securities, sale of land, and subject to clause (b) of paragraph 5 of Schedule II, sale of building.
Therefore. the DGAP has claimed that the ITC of the unsold units was outside the scope of this investigation and the Respondent was required to recalibrate the selling once of such units to be sold lo the prospective buyers by considering the net benefit of additional ITC available to him post-GST
l. The DGAP has also observed that before 01.07.2017. i.e., before the GST was Introduced, the Respondent was eligible to avail credit of Service Tax paid on the input services (CENVAT credit of Central Excise duty was not available) in respect of the flats for the project “Migsun Wynn– sold by him Moreover. the Respondent was paying VAT under Uttar Pradesh VAT Scheme. wherein he was required to discharge their output VAT liability on deemed 10% value addition to the purchase value of the inputs and the Respondent was not charging such VAT from the home buyers. Therefore. there was no direct relation between the turnover reported in the VAT returns for the period April. 2016 to June. 2017. filed by the Respondent and the actual consideration collected by him from the home buyers. Further post-GST. the Respondent could avail ITC of GST paid on all the inputs and Input services As per the data submitted by the Respondent covering the period April. 2016 to December. 2019 the details of the ITC availed by him, his turnover from the project “Migsun Wynn’ and the ratio of ITC to turnover, during the pre-GSIT (April, 2016 to June. 2017) and post-GST (July, 2017 to December, 2019) periods has been furnished by the DGAP in Table-A below-
j. The DGAP has also submitted from the above Table- 8′ that the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April 2016 to June 2017) was 0.87% and during the post-GST period (July 2017 to December 2019), it was 5A2% which clearly confirmed that post-GST, the Respondent has been benefited from additional ITC to the tune of 4.25% (512% (-) 0.870%)] of the turnover
k The DGAP has stated that the Central Government. on the recommendation of the GST Council. had levied 18% GST (effective rate was 12% in view of 1/3rd abatement for land value) on construction service, vide Notification No. 11/2017-Central Tax (Rate) dated 28.06 2017 The effective GST rate on construction service in respect of affordable and low-cost houses upto a carpet area of 60 square metros per house (affordable units) was further reduced from 12% to 8%, vide Notification No 112018-Central Tax (Rate) dated 25.01 2018. In view of the change in the GST rate after 01.07.2017. the issue of profiteering has been examined by the DGAP in three parts-
1) the post-GST period from 01.07.2017 to 31 12 2019. when the effective GST rate was 12% for units other than affordable units,
2) the post-GST period from 01.07.2017 to 24.01.2018. when the effective GST rate was 12% for affordable units and
3) the post-GST period from 25 01 2018 to 08.08.2019. when the effective GST rate was 8% for affordable units.
l. Therefore on the basis the figures contained in Table-A’ above, the comparative figures of the ratio of ITC availed/available to the turnover in the pre-GST and post-GST periods as well as the turnover, the recalibrated base price and the excess realization (profiteering) during the post-GST period, has been furnished by the DGAP In Table-T3′ below.-
m. The DGAP has also observed from Table-13 above that the additional ITC of 4.25% of the turnover should have resulted in commensurate reduction in the base price as well as cum-tax price Therefore, in terms of Section 171 of the Central Goods and Services Tax Act, 2017, the benefit of the additional ITC was required to be passed on to the recipients. The Respondent vide letter dated 22 06 2020 has informed the DGAP that he was In process of compilation of GST benefit to be given but. had not submitted any data/details of additional benefit of GST passed on to homebuyers.
n. Based on the aforesaid CENVAT/ITC availability pre and post-GST and the details of the amount collected by the Respondent from the above Applicants and other home buyers during the period from 01.07 2017 to 31.12.2019. (I) the amount of benefit of ITC that was needed to be passed on by the Respondent to the recipients or in other words, the profiteered amount came to Rs. 2,42,41,721/- which included 12% GST on other than affordable units. on the base profiteered amount o’ Rs. 2,16,44.395/-. (ii) the amount of benefit of ITC that was needed to be passed on by the Respondent to the recipients or in other wows, the profiteered amount during the period 01 07.2017 to 24.01 2018 came to Rs 2,00,98,2041- which included 12% GST on affordable units, on the base profiteered amount of Rs 1,79,44.825/- (n) the amount of benefit of ITC that was needed to be passed on by the Respondent to the recipients or in other words, the profiteered amount during the period 25 01.2018 to 31 12 2019. came to Rs 2,44,18,760/-which included 8% GST on affordable units, on the base profiteered amount of Rs. 2 28.09,963/- Therefore the total profiteered amount during the period 01 072017 to 31 12.2019 came to Rs. 6,87,58,685/-which Included GST (© 12% or 8%) on the base profiteered amount of Rs. 6,21,99,182/- This amount was inclusive of profiteered amount in respect of the First Applicant (Rs 63.7361), Second Applicant (Rs. 59.1681-) and Third Applicant (Rs 95,066/-)
o. The DGAP has concluded that the Respondent has been benefited with additional ITC of 4.25% of the taxable turnover and the same was required to be passed on to the Applicants and other recipients. Thus, the Respondent has contravened the provisions of Section 171 of the CGST Act, 2017 in as much as the additional benefit of ITC @4.25% of the base puce received by the Respondent during the period 01.0/.2017 to 31 12.2019 for the project Migsun Wynn’ registered under Uttar Pardesh RERA No. UPRERAPRJ2769, has not been passed on to the Applicants and other recipients (3 Applicants & 1155 home buyers/customers). On this account it appeared that the Respondent had realized an additional amount to tile tune of Rs. 6.87.58,6851-(Rs. Six Crore Eighty Seven Lakh Fifty Eight Thousand Six Hundred and Eighty Five only) (Including GST) which is inclusive of the amount profiteered From the Applicants. The Applicants and 1155 other recipients were identifiable as per the documents provided by the Respondent giving the names and address along with unit no. allotted to each such recipient.
p. The present investigation covered the period from 01 07 2017 to 31.12.2019. Profiteering, if any. for the period post December, 2019, had not been examined as the exact quantum of ITC that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed
3. The above Report was considered by the Authority in its meeting held on 29.01.2021 and a notice dated 04.02.2021 was issued to the Respondent to explain why the above Report of the DGAP should not be accepted and his liability for violating the provisions of Section 171 of the CGST Act, 2017 should not be determined.
4. Due to tack of quorum. the proceedings in the present case were incomplete and final order could not be passed. The quorum of this Authority was restored w.e.f. 23 02 2022 Accordingly, fresh hearing was granted to the Respondent and the Applicants.
5 Personal hearing through video conferencing was accorded to the Respondent and the Applicants on 11.05.2022, 26.05 2022 and 16.06.2022 Sr Pawan Rastogi, Chartered Accountant represented the Respondent. The Applicant No. 2, 4. 5 and 7 to 11 appeared in person during the hearing. Sh. Shivendu Pandey. Superintendent and Sh. Manoj Singh, Assistant Commissioner appeared for the DGAP
6 In response to the Notice dated 04.02.2021, the Respondent had filed his submissions dated 02.03 2021 and has stated that he has passed on the benefit of ITC to his customers and enclosed some copies of the acknowledgement receipts from the customers
7 The Respondent filed his further submissions dated 18.03 2021 and 25.06.2021 vide which he has furnished a list of 51 home buyers to whom he has claimed to have passed on the benefit of ITC and some copies of the acknowledgement receipts from the customers
8 Submissions dated 18 03.2021 were also filed by the Respondent vide which he has stated that he had booked total 1158 Oats till 31 112019, out of which 745 flats were booked in the pre-GST period and 413 flats were booked after the introduction of GST i.e. after 01.07.2017. With respect to the flats sold in the pest-GST regime, he has passed on the benefit of ITC at the time of booking by reducing the cost of the flats He has also enclosed some confirmation from the buyers claiming that they had got the benefit of ITC from the Respondent
9 Clarifications were also sought on the above submissions of the Respondent dated 25.06.2021 from the ()GAP under Rule 133(2A) of the COST Rules, 2017 The DGAP vide letter dated 03 03 2022 has submitted that the Respondent has not submitted tine contact details e.g mobile no. e-mail etc. of the customers The verification of the receipt of the ITC benefit could be confirmed once the Respondent submits the above details of his customers Hence. the DGAP requested for some more time to file his reply
10. Further, this Authority has received e-mails/letters from the home buyers in respect of the present case vide which it has been alleged that the Respondent has not passed on the benefit of ITC to them as has been claimed by him. It has also been alleged that the acknowledgement receipts of ITC benefit passed on to the flat buyers/customers submitted by the Respondent are also fake and the signature on the document i. e the Acknowledge Receipts are also forged. The allegations levelled were very serious and prima facie lead to believe that the Respondent has not passed on the benefit of ITC to the buyers. Accordingly, the Applicant No 4 to 12 were also ordered to be added as Applicants In the present case.
11 The Applicants No 1 to 12 have also hied their submissions vide various e-mails/letters to this Authority and have submitted that –
a. The Respondent has not passed on the benefit of ITC to them as claimed by him
b.. The Respondent has submitted a forged document showing the details of 51 buyers whom he claimed to have passed the benefit of ITC in 2018.
c That an order should be passed directing the Respondent to refund the benefit of ITC alongwith applicable interest.
12 The Respondent has also filed his submissions dated 14.06,2022 ana 20 06.2022 vide which he has stated that:-
a) He has passed on benefit of ITC amounting to Rs 9,77.49,000/-to his customers
b) With respect to Sh. Vikas Gahlaut, Sh Mohan Singh. Sh. Siddharth Makhija and Sh. Mano; Kumar Singhal. the Respondent has submitted that he has to pass on the benefit of ITC to the above Applicants as the above Applicants have agreed that the ITC benefit be passed on to them by waiver of interest. penalty and other charges and they have also signed a settlement letter that they would not claim any further compensation including the benefit of ITC in future.
c) With respect to the remaining Applicants other than the above mentioned, he has to pass on the benefit of ITC by way of issuing credit note to them However, the Applicants did not come to sign the confirmation
d) The project Migsun Wynn’ was launched in 2015-16 and as of now was approximately 70% completed
e) He has also enclosed Customer Ledgers alongwith their confirmation of ITC benefit passed on
f) A list of customers to whom the benefit of ITC was passed on alongwith their mapping with customer ledger and confirmation
13 We have carefully considered all the submissions filed by the Applicants. the Respondent. and the other material placed on record. Thus, the issues needed to be addressed are as follows:-
a Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 committed by Respondent?
b Whether the Respondent has passed on the benefit of ITC to his customers?
14 A perusal of Section 171 of the CGST Act shows that it provides as under –
(1) Any reduction in rate of tax on any supply of goods or services or the benefit of Input Tax Credit shall be passed on to the recipient by way of commensurate reduction in prices “
(2). The Central Government may. on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether Input Tax Credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goads or services or both supplied by him
15 The Report dated 28.01.2021 submitted by the DGAP has been carefully examined by this Authority and it is found that.-
a. The Applicants had alleged that the Respondent was not ( passing on the benefit of ITC to them on purchase of the flats in the project Migsun Wynn’ being executed by the Respondent in Greater Node, Uttar Pradesh.
b The DGAP filed his Report dated 28.01.2021 stating that Me ITC as a percentage of the total turnover which was available to the Respondent during the pre-GST period was 0.87% and during the post-GST period this ratio was 5 12%, as per the Table-A mentioned above and therefore, the Respondent has benefited from the additional ITC to the tune of 4.2594 (5.12’% – 0.87%).
c. Thus the Respondent has profiteered an amount of –
i. Rs 2,42,41,721/- including 12% GST on other than affordable housing units, on the base profiteered amount of Rs.2,16,44,395/-.
ii. Rs 2,00,98,204/- including 12% GST on affordable units, on the base profiteered amount of Rs 1,79.44.8251- and
iii. Rs. 2,44,18,760/- including 8% GST on affordable units, on the base profiteered amount of Rs. 2,26,09.9631-.
d Therefore, the total profiteered amount during the period 01.07.2017 to 31 12.2019 is arrived at Rs. 6,87,58,6851-which includes GST t© 12% or 8%) on the base profiteered amount of Rs. 6.21.99.182/-
e The profiteered amount was in respect of the 1158 customers/recipients/flat buyers who hare purchased fiats in the subject project of the Respondent
16 It is clear from the perusal of the above Reports that the DGAP has computed the ratio of CENVAT to the turnover for the pre GST period and compared it with the ratio of ITC to the turnover for the post GST period and then computed the percentage of the benefit of additional ITC which the Respondent is required to pass on to the flat buyers. The above ratios have been computed by the DGAP based on the Service Tax and GST Returns filed by the Respondent during both the above periods and the ITC Registers maintained by him for the above periods and hence, the ratios calculated by the DGAP are based on the factual record submitted by the Respondent and therefore, they can be relied upon while computing the profiteered amount The Respondent has also not raised any objection against the methodology employed by the DGAP while calculating the above ratios The above methodology has also been approved by this Authority in all the cases where the benefit of FTC Is required to be passed on Therefore, the above methodology is appropriate, logical. reasonable, and in consonance with the provisions of Section 171 of the CGST Act, 2017.
17. The only plea of the Respondent before this Authority is that he has passed on the benefit of ITC amounting to Rs 9,77,49,000/- to all his customers and has submitted sample acknowledgement receipts claimed to have been received from the customers vide which, according to the Respondent, the customers have acknowledged that they had received the benefit of ITC from the Respondent In this regard, this Authority finds that with respect to the above claim and contention of the Respondent, the DGAP was directed to verify whether the Respondent has passed on the benefit of ITC to the 51 customers as per the list provided by him or not. The DGAP gave ample opportunities to the Respondent to submit the details as required by the DGAP so that the above claim of the Respondent can be verified at least for such homebuyers/customers on a sample basis However, the Respondent has not submitted the requisite documents/information before the DGAP. Further, during the course of nearing the Applicants have also submitted that the acknowledgement receipts submitted by the Respondent before this Authority are fake and the signatures of the recipients are forged. Further. upon perusal of the submissions filed by the Respondent. it is revealed that the Respondent has not submitted all the purported acknowledgement receipts received from each and every customer/flat buyer Ito whom ITC benefit is claimed to have been passed on) stating that they have received the benefit of ITC from the Respondent Hence, the claim of the Respondent that he has passed on the benefit of ITC to all his customers is not substantiated by any verifiable record so as to determine the veracity of such claim Hence, such claim of the Respondent needs proper and in depth verification by way of receipt of acknowledgement’s from each and every customer that they have received the benefit of ITC from the Respondent and verification of the It authenticity of such documents. This is especially necessary as the Applicants have unequivocally alleged that signatures have been forged and sample receipts are fake Hence in the absence of authentic acknowledgment receipts/ verifiable evidence/ documents from the customers/flat buyers, the Authority finds that it cannot be accepted that the Respondent has passed on the benefit of ITC to his homebuyers/customers/recipients
18. Further, all the Applicants have submitted that they have not received the benefit of ITC from the Respondent (as has been claimed by him) and the acknowledgement receipts submitted by the Respondent are fake and the signatures of the flat buyers/customers on the acknowledgement receipts are forged by the Respondent. With respect to the above contention of the Applicants. It would be relevant to mention that the mandate of this Authority lies within the provisions of Section 171 of the CGST Act, 2017 This Authority has only been mandated to investigate whether both the benefits of tax reduction and ITC have been passed on the to the consumers or not Hence, any other such issue/allegation as raised by the Applicants, which is not related to profiteering, cannot he entertained by the Authority. Therefore, the Applicants may approach the appropriate Authority with respect to the issues which are not related to determination of the profiteered amount
19 Hence, this Authority finds that. it is established from the above fads that the Respondent has benefited from the additional ITC to the extent of 4 25% of the turnover during the period from July 2017 to December 2019 and hence the provisions of Section 171 of the CGST Act. 2017 have been contravened by the Respondent as he has not passed on the benefit of such additional ITC to his customers Thus this Authority determines the profiteered amount as Rs. 6,87,58,6861-(inclusive of GST @ 12% or 8% as applicable) in terms of Rule 133 (1) of the CGST Rules. 2017 [This amount is inclusive of profiteered amount. if any, in respect of the Applicant no. s 1 to 12) The above amount that has been profiteered by the Respondent from his home buyers shall be refunded/returned/passed on by him, if not already passed on, along with interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment, in accordance with the provisions of Rule 133 (3) (b) of the GCST Rules 2017.
20. This Authority under Rule 133 (3) (a) of the CGST Rules. 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the Units commensurate with the benefit of ITC received by him as has been detailed above
21. The Respondent is also liable to pay interest as applicable on the entire amount profiteered. i.e. Rs. 6,87,58 685/-. Hence the Respondent }s directed to also pass on interest @18% to the homebuyers/customers/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
22 The Authority also orders that the profiteered amount of Rs 6,87,58,6851- along with the interest @ 18%, from the date of receiving such amounts from the homebuyers/customers till the date of passing on/return of such amount shall be paid/passed on by the Respondent, if not already passed on. within a period of 3 months from the date receipt of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017
23 The complete list of eligible homebuyers/customers/recipients has been attached with this Order, with the details of amount of benefit of ITC to be passed on/returned/refunded to each such customer. along with interest & 18%, if not already paid, as in the Annexure-1 to this Order.
24 The concerned jurisdictional CGST/SGST Commissioner is directed to ensure compliance of this Order It may be ensured that the benefit of ITC is passed on to each homebuyer as per Annexure- 1 attached with this Order along will interest @18%, if not paid already 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 builder (Respondent) – MIS SJP Hotels and Resort Pvt. Ltd.. Project- ‘Migsun Wynn’. Location- Greater Noida. Uttar Pradesh and amount of profiteering Rs 6.87,58.685/- so that the concerned homebuyers/customers/recipients can claim the benefit of ITC if not passed on Homebuyers/customers/recipients may also be informed that the detailed NAA Order is available on Authority’s website www.naa.gov.in. Contact details of concerned Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement
25. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to the homebuyers/customers of the Units being constructed by him in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. Section 171 (3A) of the CGST Act. 2017 has been inserted In the CGST Act, 2017 vide Section 112 of the Finance Act. 2019, w.e.f 01.01.2020 and hence, was not in force during the period of investigation i.e. from 01.07.2017 to 31 12 2019, when the Respondent had committed the above violation and hence the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.
26 The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this Order to this Authority and the DGAP within a period of 4 months from the date of receipt of this order
27 The present investigation has been conducted up to 31.12.2019 only However, the Respondent is liable to pass on the benefit of ITC which would become available to him till the date of issue of Completion Certificate. Accordingly, the concerned jurisdictional Commissioner CGST/SGST are directed to ensure that the Respondent passes on the benefit of ITC to the eligible home buyers/shopbuyers/customers as per the methodology approved by this Authority in the present case and submit report to this Authority through the DGAP The Applicant No 1 or any other interested party/person shall also be at liberty to file complaint against the Respondent before the Uttar Pradesh State Screening Committee in case the remaining benefit of ITC is not passed on to them
28 It appears that the Respondent may have undertaken other construction projects under the GSTIN 09AALCS8695P1ZZ Hence, the Authority, in terms of Rule 133(5) of the CGST Rules. 2017 also directs the DGAP to investigate profiteering in relation to all other Projects executed by the Respondent if such Projects attract the provisions of Section 171 of the CGST
29. Further, the Hon’ble Supreme Court. vide its Order dated 23.03.2020 in Suo Moto Writ Petition (C) no 3/2020. while taking suo-moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) including those prescribed under Rule 133(1) of the CGST Rules. 2017, as is clear from the said Order which states as follows –
‘A period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e. f 15M March 2020 till further order/s to be passed by this Court in present proceedings “
Further, the Hon’ble Supreme Court, vide its subsequent Order dated 10.01 2022 has extended the period (s) of limitation till 28.02 2022 and the relevant portion of the said Order is as follows –
“The Order dated 23 03.2020 is restored and in continuation of the subsequent Orders dated 08.03.2021, 27 04.2021 and 23 09 2021. it is directed that the period from 1503.2020 till 28.02 2022 shall stand excluded for the purposes of limitation as may be prescribed under any general of special laws in respect of all judicial or quasi-judicial proceedings
Accordingly this Order having been passed today falls within the Imitation prescribed under Rule 133(1) of the CGST Rules, 2017.
30. A copy each of this order be supplied to both the Applicants, the Respondent and Commissioners CGST/SGST. Uttar Pradesh. the Principal Secretary (Town and Country Planning), Government of Uttar Pradesh as well as Uttar Pradesh RERA for necessary action
