NAA_IO 01/2021

Prestige Estates Projects Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant had stated that he had purchased a flat in the respondent's project “Prestige Lake Ridge” and had alleged that the respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the prices - DGAP in its report stated 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 1.56% and during the post-GST period (July 2017 to September 2019) it was 5.42% and which clearly confirmed that post-GST, the respondent had been benefited from additional ITC to the tune of 3.86% of the taxable turnover; that the ITC of 3.86% of the turnover should have resulted in commensurate reduction in the base prices; that the benefit of additional ITC that had accrued to the respondent was required to be passed on to the recipients - Respondent has claimed that he has passed an amount of Rs.8,28,91,520/- which has been duly verified with the Credit notes, ledgers, customers' communication letters, customers' master list and acknowledgement (sample basis) submitted by the respondent - DGAP in its further report submitted that the respondent was required to pass on the benefit of ITC in respect of demands raised up to 30.09.2019 to the tune of Rs.7,90,97,474/- but the respondent had passed an amount in excess of Rs.37,94,046/-; therefore, the allegation that the respondent has contravened the provision of s.171 of the Act is not sustainable - Respondent vide his submissions dated 03.12.2020 has stated that he has no objections to the report of the DGAP; the applicant has vide email confirmed the acknowledgement regarding the receipt of Rs.1,78,251/- as the benefit from additional ITC from the respondent.

Held: Once the respondent has claimed that he had passed on the benefit of ITC to his customers/flat buyers/recipients and claimed the benefit of such amount, the onus to prove that the benefit of ITC was actually passed on to the eligible buyers was on the respondent - Sample checking of the evidence by the DGAP by contacting the customers can, at best, give provisional indication of passing on the benefit of ITC, however, it would not provide true and complete picture - in the present case, the amount of ITC benefit claimed to have been passed on was huge - Rs.8,28,91,520/- and hence it was the responsibility of the respondent to submit proper and complete evidence - that the evidence should have included the details of payments, how such payments were made (through cheque/draft/credit note etc.) that it was relatable to GST benefit (because of additional ITC) and a third party verification certificate validating such claim - Acknowledgement receipts of only four customers were submitted and these receipts do not mention the amount of ITC benefit passed on by the respondent to them; thus evidence in respect of only 4 out of 454 customers has been submitted and even that too is not sufficient - Respondent shall submit the homebuyer wise evidence within a period of 30 days and the same shall then be verified by the DGAP - Matter is sent back to the DGAP for further  investigation in terms of provisions of s.171(2) of the Act, 2017 read with rule 133(4) of the CGST Rules, 2017 - DGAP is accordingly, directed to reinvestigate the above issue and furnish his report under rule 129(6) of the Rules, 2017 - DGAP report is also silent as to whether the respondent has paid applicable interest to all the eligible  customers/flat buyers/recipients or not - DGAP to investigate in this regard too - Order passed by noting the provisions of notification 91/2020-CT dt.14.12.2020: NAA

Interim order passed