GST Appellate Tribunal, New Delhi
DG Anti Profiteering, Director General of Anti-profiteering, DGAP v. Merit Magnum Construction (Formerly M/s Vimal Builders)
For revenue
GST Appellate Tribunal, New Delhi
Mere filing of Occupancy Certificate application does not constitute project completion; completion occurs only on grant of Occupancy Certificate, and ITC availed till such grant must be considered for determining post-GST anti-profiteering liability.
Since sales made post-Occupancy Certificate are not taxable supplies and related ITC is inadmissible, anti-profiteering applies only up to date of Occupancy Certificate; accordingly, investigation should cover period upto Occupancy Certificate and revised computation based on CA-certified data was upheld.
In real estate projects, determination of anti-profiteering iamount by comparing pre-GST ITC-to-purchase ratio and post-GST ITC-to-purchase ratio up to Occupancy Certificate date and allocating per sq. ft. benefit to eligible buyers, reasonably quantifies additional ITC required to be passed on.
Where homebuyers are identifiable from project records, Rule 133(3)(b) requires refund of profiteered amount with 18% interest to each recipient; residuary deposit under Rule 133(3)(c) cannot be invoked merely because no complaint was made or buyers are temporarily unavailable.
Penalty under Section 171(3A) of the CGST Act is prospective from 01.01.2020 and, in the absence of express retrospective operation, cannot be imposed for anti- profiteering pertaining to periods prior thereto
Section 171, read with section 7, of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017; Section 171, read with sections 7 and 17, of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017 - Rule 129, read with rule 133, of Central Goods and Services Tax Rules, 2017/Delhi Goods and Services Tax Rules, 2017; Section 171 of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017 - Rule 126 of Central Goods and Services Tax Rules, 2017/Delhi Goods and Services Tax Rules, 2017; Section 171 of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017 - Rule 133 of Central Goods and Services Tax Rules, 2017/Delhi Goods and Services Tax Rules, 2017 - Section 171 of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017; Section 171, read with section 171(3A), of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017
This summary is for general information and is not legal advice. Read the full decision and the applicable law before relying on it.
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Delhi High Court
Where developer of residential project was charged with profiteering on computation of ITC benefit for homebuyers, DGAP on remand quantified benefit using purchase value against project cost and area-wise distribution, conforming with remand directions and distinct from methodology earlier rejected, no breach of jurisdiction or legal error arose thus, no interference with GSTAT order upholding DGAP report was warranted GST: Where anti-profiteering assessment for petitioner’s project compared actual post-GST ITC including goods and services with NIL pre-GST availed credit as per ST-3 returns, and petitioner admitted non-availment of eligible pre-GST CENVAT on services, calculation based on actual availment rather than entitlement was correct and exclusion of services ITC from computation was unjustified GST: Where petitioner challenged anti-profiteering computation on grounds of increased GST rate and argued rate-led ITC was not a benefit, authorities upheld DGAP's project-level saving and base profiteering methodology as fair, reasonable, and responsive to project features, finding no error in quantification or ground to interfere with GSTAT affirmation, recalculation demands for actual economic benefit under Section 171 was to be rejected GST: Where DGAP's methodology included GST at 12 percent on base profiteered amount for a builder's project by treating GST collected on excess realization as part of profiteering, such quantified inclusion was lawful and aligned with precedent, and no illegality in GST addition was found, hence no basis for writ interference on this aspect GST: Where homebuyers of residential project raised profiteering complaint and GST authoriti…
GSTAT New Delhi
Where cinema retained admission ticket prices after GST rate reduction from 18% to 12% for tickets up to Rs 100 during Jan to Mar 2019 and increased base prices instead of reducing gross prices, this constituted profiteering under Section 171 as amounts belonging to consumers were not passed on, irrespective of cost or market factors, requiring deposit of profiteered sum with interest in consumer welfare fund
GSTAT New Delhi
Where residential project developer failed to pass on additional ITC benefit post-GST, and DGAP recomputation properly excluded reversed unutilised ITC, methodology and revised profiteering amount of Rs. 2.62 lakh plus interest were to be accepted, making developer liable to pass on said amount with 18% interest to eligible homebuyers