2022-TIOL-67-SC-GST
UoI Vs Bharat Forge Ltd
GST - Petitioner Bharat Forge Ltd. (now respondent) had pleaded before the Allahabad High Court that a writ of mandamus be issued directing the tendering authority [Diesel Locomotive Works, Varanasi] to indicate the HSN Code of the procurement product, i.e. 'Turbo Wheel Impeller Balance Assembly' in the tender document itself [Chapter 84 as HSN Code no.84148030], to ensure a uniform bid from the tenderers and balance to provide a level-playing field to all bidders/tenderers, by including uniform GST rates in the base price - Inasmuch as bidders selected as L-1, L-2 and L-3 had quoted GST @ 5%, whereas the petitioner quoted 18% GST rate, which has resulted in increase in the margin of purchase preference for more than 20% and had the margin of purchase preference was less than or up to 20%, the petitioner could get benefit of Make in India Policy being the local manufacturer - High Court had opined that if the GST value is to be added in the base price to arrive at the total price of offer for the procurement product in a tender, and is used to determine the inter se ranking in the selection process, it is incumbent on the part of the respondent nos.1 and 2 to clarify the HSN Code, i.e. to clear their stand with regard to the applicable GST rate and HSN Code of the "procurement product"; that the mentioning of HSN Code in the tender document itself would resolve all disputes relating to fairness and transparency in the process of selection of bidder, by providing 'level playing field' to all bidders/tenderers in the true spirit of Article 19(1)(g) of the Constitution of India-High Court had, therefore, issued a direction to respondent no.2 namely, the General Manager, Diesel Locomotive Works, Varanasi to mention the HSN Code of the procurement product(if need be by consulting GST authorities) in the NIT (Notice inviting tender)tender/bid document, so as to ensure uniform bidding from all participants and to provide all tenderers/bidders a 'Level Playing Field' - UOI is aggrieved with this direction and has filed appeal before the Supreme Court.
Held: The liability to pay tax under the GST regime is on the supplier - He must make inquires and make an informed decision as to what would be the relevant HSN Code applicable to the items and the rate of tax applicable - Thereafter, when he makes the bid, the issue of competition for winning the bid, would come into clear focus - The goal of the bidder ordinarily is to emerge successful and bag the contract - The extent of profit that he would earn, is a matter, which is essentially a matter to be decided by him - He may, for germane reasons, wish to bag a contract, with situations ranging from one extreme end of the spectrum, viz., even when the prospect of a loss stares at him, or a slightly brighter outcome, viz., the contract working on a break-even basis or moving on to an even more optimistic possibility, namely, of the contract earning him profit, which he is willing to take at a modest rate or a rate which he considers as reasonable in his understanding and circumstances - This is a matter to be left to the commercial expediency of the bidder - Now, when the matter is viewed from the perspective of the purchaser, the purchaser seeks to buy goods and services or both by awarding the contract to the lowest bidder - When the purchaser happens to be the State, it would be not fair or reasonable to not expect it to accept the bid of the lowest bidder unless it decides to not accept the bid of the lowest bidder for reasons which are fair and legal - No doubt, it is not the law that the Government is bound to accept the lowest bid - It is always open to the Government for relevant, valid and fair reasons, to not accept even the lowest bid -It is the rate quoted by the tenderers which governs - It is the same which will be used to carry out the ranking - Bench is at a loss to further understand how in the name of producing a level playing field, the State, when it decides to award a contract, would be obliged to undertake the ordeal of finding out the correct HSN Code and the tax applicable for the product, which they wish to procure - This is, particularly so when the State is not burdened with the liability to pay the tax - The liability to pay taxis squarely on the supplier - There are adequate safeguards and Authorities under the GST Regime must best secure the interests of the Revenue -There is no duty cast on the Board under the Central Act or on the Commissioner under the State Act to issue any clarification, as directed in the impugned Judgment - There is no duty cast on the appellants to seek such direction,therefore, the appellants are right in contending that there is no statutory duty, which could have been enforced in the manner done in the impugned Judgment - There is no public duty which is enforceable -In other words, being an indirect tax, while it is open to a bidder to pass it on to the buyer (the appellant), nothing stands in the way of the bidder, partly or wholly, absorbing the tax - The liability to pay the tax under the GST regime is with the supplier unless it falls under Section 9(3) of the GST Act - Further, the appellants (UOI) cannot declare a GST rate and make it binding on the bidder - This is why, in the Circular dated 05.09.2017, issued by the Railway Board, it conferred a discretion on the purchaser, to incorporate the HSN Number in the tender document -Appellants have made out a clear case for interference with the impugned Judgment -Appeal is allowed, impugned judgment is set aside and Bench further directs that the appellants will comply with the directions given in paragraph-61: Supreme Court [para 38, 46, 47, 49, 55, 61, 62]
- Appeal allowed :SUPREME COURT OF INDIA
2022-TIOL-45-NAA-GST
Axis Concept Construction Pvt Ltd
GST - Anti Profiteering - The present application arises out of an complaint filed by the applicant against the respondent-company in respect of a residential unit developed by the respondent - The applicant alleged that the respondent did not pass on commensurate benefit of ITC post GST rate reduction - The applicant had later cancelled booking of the flat in the respondent's project, however in course of investigation, the DGAP held that the respondent had availed ITC regardless of cancellation of booking and so was liable to pass on commensurate benefit.
Held - The Authority finds no reason to differ from the profiteering amount computed by the DGAP in its report or the methodology adopted therein - The profiteering amount of Rs 40.94 lakhs is upheld - The respondent is directed to reduce the price of the flats realised from the customers commensurate with the benefit of ITC received - The respondent is also liable to pay 18% interest on the profiteering amount computed by the DGAP - The respondent denied ITC in contravention with the provisions of Section 171(1) and so committed an offence u/s 171(3A) of the CGST Act - The respondent also may not have passed on commensurate benefit of ITC in respect of the other projects being developed - Hence the DGAP is directed to investigate the other projects as well - Compliance with this order be monitored by the Commissioner concerned: NAA
- Application disposed of: NAPA
2022-TIOL-43-NAA-GST
M3M India Pvt Ltd
GST - Anti Profiteering - The present application arises out of an complaint filed by the applicant against the respondent-company in respect of a residential unit developed by the respondent - The applicant alleged that the respondent did not pass on commensurate benefit of ITC post GST rate reduction - The applicant had later cancelled booking of the flat in the respondent's project, however in course of investigation, the DGAP held that the respondent had availed ITC regardless of cancellation of booking and so was liable to pass on commensurate benefit.
Held - The Authority finds no reason to differ from the profiteering amount computed by the DGAP in its report or the methodology adopted therein - The profiteering amount of Rs 17.85 lakhs is upheld - The respondent is directed to reduce the price of the flats realised from the customers commensurate with the benefit of ITC received - The respondent is also liable to pay 18% interest on the profiteering amount computed by the DGAP - The respondent denied ITC in contravention with the provisions of Section 171(1) and so committed an offence u/s 171(3A) of the CGST Act - The respondent also may not have passed on commensurate benefit of ITC in respect of the other projects being developed - Hence the DGAP is directed to investigate the other projects as well - Compliance with this order be monitored by the Commissioner concerned: NAA
- Application disposed of: NAPA
2022-TIOL-41-NAA-GST
Wadhwa Realty Pvt Ltd
GST - Anti Profiteering - The present application arises out of an complaint filed by the applicant against the respondent-company in respect of a residential unit developed by the respondent - The applicant alleged that the respondent did not pass on commensurate benefit of ITC post GST rate reduction - The applicant had later cancelled booking of the flat in the respondent's project, however in course of investigation, the DGAP held that the respondent had availed ITC regardless of cancellation of booking and so was liable to pass on commensurate benefit.
Held - The Authority finds no reason to differ from the profiteering amount computed by the DGAP in its report or the methodology adopted therein - The profiteering amount of Rs 4.44 lakhs is upheld - The respondent is directed to reduce the price of the flats realised from the customers commensurate with the benefit of ITC received - The respondent is also liable to pay 18% interest on the profiteering amount computed by the DGAP - The respondent denied ITC in contravention with the provisions of Section 171(1) and so committed an offence u/s 171(3A) of the CGST Act - The respondent also may not have passed on commensurate benefit of ITC in respect of the other projects being developed - Hence the DGAP is directed to investigate the other projects as well - Compliance with this order be monitored by the Commissioner concerned: NAA
- Application disposed of: NAPA
2022-TIOL-39-NAA-GST
Haamid Real Estate Pvt Ltd
GST - Applicant had alleged that Respondent had not passed on benefit of input tax credit to him by way of commensurate reduction in price of unit purchased by him from respondent on introduction of GST w.e.f. 01.07.2017, in terms of Section 171 of CGST Act, 2017 - The Authority finds that Respondent has profiteered by an amount of Rs 3,52,59,318 during period July 2017 to April 2020 - Said amount shall be refunded by him alongwith interest @18% thereon - This Authority under Rule 133 (3) (a) of CGST Rules, 2017 orders that Respondent shall reduce the prices to be realized from buyers of flats commensurate with benefit of ITC received by him - Concerned jurisdictional Commissioner CGST/SGST are directed to ensure compliance of order - An advertisement of appropriate size to be visible to 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)- M/S Haamid Real Estate Pvt Ltd. Project- "The Peaceful Homes ", Location- Gurgaon, Haryana and amount of profiteering so that the concerned homebuyers can claim the benefit of ITC if not passed on - Homebuyers may also be informed that detailed NAA Order is available on Authority's website www.naa.gov.in. - Contact details of concemed Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement - A report in compliance of this Order shall be submitted to this Authority and DGAP, by the Commissioners CGST /SGST within a period of 4 months - This Order having been passed today falls within the limitation prescribed under Rule 133(1) of CGST Rules, 2017: NAA
- Application disposed of: NAPA
2022-TIOL-38-NAA-GST
Wheelabrator Alloy Castings Pvt Ltd
GST - An application was filed under Rule 128 of CGST Rules 2017 alleging profiteering by Respondent in respect of purchase of a flat in Respondent's project - Applicant had alleged that Respondent had not passed on benefit of input tax credit to him by way of commensurate reduction in price on implementation of GST w.e.f. 01.07.2017, in terms of Section 171 of CGST Act, 2017 - The Authority finds that Respondent has benefited from additional ITC to the extent of 0.46% of turnover during the period from 01.07.2017 to 31.12.2018 and hence provisions of Section 171 of CGST Act, 2017 have been contravened by Respondent as he has not passed on the benefit to his customers - Authority determines that Respondent has realized an additional amount of Rs. 49,22,281/- which includes both profiteered amount @ 0.46% of taxable amount (base price) and GST @ 8% / 12% on said profiteered amount from 394 flat buyers other than Applicant - This Authority under Rule 133 (3) (a) of CGST Rules, 2017 orders that Respondent shall reduce the prices to be realized from buyers of flats commensurate with benefit of ITC received by him - Concerned jurisdictional Commissioner CGST/SGST are directed to ensure that Respondent passes on the benefit of ITC to eligible flat buyers as per methodology approved by Authority and submit report to this Authority through DGAP - Since, no penalty provisions were in existence between period from 01.07.2017 to 31.12.2018 for which profiteered amount has been calculated and Respondent is found to have violated the provisions of Section 171, penalty prescribed under Section 171 (3A) cannot be imposed on Respondent for profiteering done during such period - This Authority as per Rule 136 of CGST Rules, 2017 directs Commissioners of CGST/SGST to monitor compliance of this Order, under supervision of DGAP by ensuring that amount profiteered by Respondent, is passed along with interest @ 18% as prescribed, to all eligible buyers as ordered by Authority - An advertisement of appropriate size to be visible to 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)- M/S Wheelabrator Alloy Castings Pvt Ltd. Project- "Runwal Forests", Location- Mumbai, Maharashtra and amount of profiteering i.e. Rs. 49,26,054/- so that the concerned homebuyers can claim the benefit of ITC if not passed on - Homebuyers may also be informed that detailed NAA Order is available on Authority's website www.naa.gov.in. - Contact details of concemed Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement - A report in compliance of this Order shall be submitted to this Authority and DGAP, by the Commissioners CGST /SGST within a period of 4 months - This Order having been passed today falls within the limitation prescribed under Rule 133(1) of CGST Rules, 2017: NAA
- Application disposed of: NAPA
2022-TIOL-37-NAA-GST
Godrej Project Development Pvt Ltd
GST - Anti-Profiteering - s.171 of the Act, 2017 - Allegation is that the respondent has not passed on the benefit of ITC by way of commensurate reduction in price of the flat purchased by applicant in the respondent no. 1's project ‘Godrej Summit' situated at Gurugram, Haryana.
Held: DGAP in its report dated 27.02.2019 has stated that the respondent had obtained additional benefit of ITC to the extent of 7.05% of the taxable turnover which he had not passed on to his buyers and he had thus profiteered an amount of Rs.1,67,24,158/- (inclusive of GST) in violation of the provisions of s.171 of the Act, 2017 - Later, due to objections by respondent as well as discrepancies found in the report, the matter was re-investigated and a fresh report was submitted on 26.08.2020 wherein the DGAP reported that the ITC as a percentage of the total turnover which was available to the respondent no. 1 during the pre-GST period was 3.70% and during the post-GST period was 5.25% and, therefore, the respondent had benefited from the additional ITC to the tune of 1.55% and the total amount of benefit that was to be passed to the buyers is Rs.67,18,426/- (inclusive of GST @12%) for the period 01.07.2017 to 30.11.2019 and the amount profiteered by the respondent no. 2 is Rs.4,59,286/- - The authority takes cognisance, based on the DGAP's verification that the respondent no.1 has passed on the benefit by credit notes/tax invoices of the amount profiteered by him - also respondent no.2 is required to pass on the benefit of Rs.3,61,621/- since benefit amount of Rs.97,665/- has already been passed to homebuyers by way of credit notes - Authority further directs that respondents no. 1 & 2 shall pay interest @18% per annum on the additional amounts collected from each recipient of supply from the date such amounts were collected by them up to the actual date of passing on/return of such amount to each recipient as prescribed by rule 133(3)(b) of the Rules, 2017 - Order should be complied within a period of three months - An advertisement of appropriate size should also be published in minimum of two local newspapers/vernacular press with details of the supplier and amount of profiteering so that the homebuyers concerned can claim the benefit of ITC/interest, if not already passed on - In view of the apex court decision dated 10.01.2022 the period of limitation has been extended, therefore, the order being passed now by the Authority is within the limitation period prescribed under rule 133(1) of the Rules, 2017: NAA
- Application disposed of: NAPA
2022-TIOL-35-NAA-GST
Portronics Digital Pvt Ltd
GST - An application was filed under Rule 128 of CGST Rules 2017 alleging profiteering by Respondent in respect of power bank - It is alleged that base price of goods was increased when there was reduction in GST from 28% to 18% w.e.f. 1.1.2019, so that the benefit of such reduction in GST rate was not passed on to recipients by way of commensurate reduction in price - Since the recipients are not identifiable, Authority under provisions of Section 171(1) read with Rule 133(3)(c) of CGST Rules, 2017 directs that 50% of amount alongwith interest @ 18% be deposited in Central Consumer Welfare Fund and the balance amount is to be deposited in CWF of concerned state and U.T. - Said amount shall be deposited alongwith interest @18% by respondent within a period of three months - Since no penalty provisions were in existence between period from 1.1.2019 to 31.3.2019, when respondent had violated provisions of Secion 171(1), penalty prescribed under section 171(3A) cannot be imposed on respondent retrospectively - Concerned jurisdictional Commissioner CGST/SGST/UTGST are directed to monitor this order under supervision of DGAP by ensuring that amount profiteered by respondent as ordered by Authority is deposited in respective Consumer welfare funds - This Order having been passed today falls within the limitation prescribed under Rule 133(1) of CGST Rules, 2017: NAA
- Application disposed of: NAPA
2022-TIOL-34-NAA-GST
Arihant Superstructures Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Project Arihant Aanchal situated at Jaisalmer Bypass road, Jodhpur Rajasthan - Allegation of applicant is that the respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price against payments due to him.
Held: Authority holds that the ITC as a percentage of the turnover that was available to the respondent during the pre-GST period was 1.27% and during the post-GST period was 6.67% and which confirms that the respondent has benefited from additional ITC to the tune of 5.40% of his turnover and the same was required to be passed on to the Applicant no.1 and the other home buyers/shop buyers/customers - Authority determines the amount profiteered by respondent for the project Arihant Anchal Phase I during the period 01.07.2017 to 30.09.2019 as Rs.1,78,32,984/- - This amount is required to be passed on to all the buyers in the project along with interest @18% within a period of 3 months - An advertisement of appropriate size should also be published in minimum of two local newspapers/vernacular press with details of the supplier and amount of profiteering so that the homebuyers concerned can claim the benefit of ITC/interest which is not passed on to them - In view of the apex court decision dated 10.01.2022 the period of limitation has been extended, therefore, the order being passed now by the Authority is within the limitation period prescribed under rule 133(1) of the Rules, 2017: NAA
- Application disposed of: NAPA
