ORDER

1. The present Report dated 23.03.2020 has been furnished by the Director General of Anti Profiteering (here-in-after referred to as the DGAP) under Rule 126 of Central Goods and Services Tax Rules (CGST) 2017. The brief facts of the case are that the DGAP had received a reference from the Standing Committee on Anti-Profiteering on 28.06.2019 to conduct a detailed investigation in respect of a complaint filed by Applicant No. 1 before the Standing Committee on Anti-profiteering, stating therein that he had purchased a flat in the project “Suncity Avenue-102”, Sector-102, Gurgaon, Haryana from the Respondent, and that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017. Before recommending the investigation under Rule 129 (1) of the CGST Rules, 2017, the aforesaid complaint had been examined by the Standing Committee on Anti-profiteering in its meeting held on 15.05.2019.

2. On receipt of the aforesaid reference and the supporting documents from the Standing Committee on Anti-profiteering on 28.06.2019, a Notice under the provisions of Rule 129 (3) of the CGST Rules, 2017 was issued by the DGAP on 08.07.2019 calling upon the Respondent, to intimate as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of a commensurate reduction in the price of the flat and if 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. Further, vide DGAP’s Notice dated 08.07.2019, the Respondent was allowed to inspect the non-confidential evidence/information submitted by Applicant No. 1 on any day between 15.07.2019 and 17.07.2019. The Respondent availed of the opportunity to inspect the non-confidential documents on 17.07.2019. Likewise, vide DGAP’s email dated 10.01.2020, Applicant No. 1 was also offered the opportunity to inspect the non-confidential documents/ information furnished by the Respondent on either 14.01.2020 or 15.01.2020, which Applicant No. 1 availed of on 15.01.2020.

3. The DGAP has reported that the period covered by the current investigation was from 01.07.2017 to 30.06.2019. the DGAP has also stated that the time limit to complete the investigation had been extended up to 27.03.2020 in terms of Rule 129 (6) of the CGST Rules, 2017 by this Authority vide its Order dated 12.12.2019.

4. Further, the DGAP has reported that in response to the DGAP’s Notice dated 08.07.2019, the Respondent vide his letters/ e-mails dated 16.08.2019, 12.11.2019, 13.12.2019, 31.12.2019, 02.01.2020, 10.01.2020 and 17.01.2020 has submitted before the DGAP that:-

(i) He had developed an affordable group housing project, “Suncity Avenue-102”, situated at village Dhankot, Sector-102, Gurugram, Haryana under License No. 3 of 2015, issued by Director General, Town & Country Planning, Haryana, Chandigarh.

(ii) He had suo moto passed on the benefit of ITC to his customers/ homebuyers by adjusting the last demand raised by him on his customers/ homebuyers by way of a commensurate reduction in price despite the absence of any formal mechanism stipulated for the calculation of the Anti-profiteering; that to evidence that he had passed on the benefit to Applicant No. 1 and other customers/ homebuyers and he was submitting the following documents, namely a copy of the ‘Acknowledgement and No Grievance Letter’ dated 12.12.2019 issued by Applicant No. 1 as also a similar ‘Acknowledgement and No Grievance Letter’ of Sh. Birinder Singh (the buyer of residential unit No. B-902), and a copy of the “Ledger Account” maintained by him in respect of Applicant No. 1.

5. The DGAP has also reported that vide his abovementioned replies, the Respondent also furnished the following documents/ information:-

(a) Copies of his GSTR-1 returns for the period July 2017 to June 2019.

(b) Copies of his GSTR-3B returns for the period July 2017 to June 2019.

(c) Copies of the Tran-1 & Trans-2 filed by him.

(d) Copies of his VAT & Service Tax (ST-3) returns for the period April 2016 to June 2017.

(e) Copies of all the demand letters issued to Applicant No.1 and a copy of the Agreement he had executed with the Applicant No.1.

(f) Details of the various taxes and tax rates leviable in his case in the pre-GST and the post-GST periods.

(g) Copy of his Balance Sheet (including all Annexures), his Profit & Loss Account, and Cost Audit Report for financial yea₹ 2016-17 & 2017-18.

(h) Copy of Electronic Credit Ledger for the period 01.07.2017 to 30.06.2019.

(i) CENVAT Credit/Input Tax Credit registers for the period from April 2016 to June 2019.

(j) 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 June 2019 for the project “Suncity Avenue-102”.

(k) List of homebuyers in the project “Suncity Avenue-102” along with the details of Input Tax Credit benefit passed on.

(l) Ledger Account statement maintained by him for his homebuyers.

6. The DGAP has further reported that a careful examination of the case records has revealed that the main issue for determination is as to whether the Respondent had benefitted on account of input tax credit (ITC) as a result of the implementation of GST w.e.f. 01.07.2017 and if so, whether such benefit was passed on by the Respondent to his homebuyers/ recipients in terms of Section 171 of the Central Goods and Services Tax Act, 2017.

7. The DGAP has reported that based on the examination of case records, especially the Agreement executed between the Respondent and Applicant No. 1 and the Intimation-cum-Demand letters issued by the Respondent to Applicant No.1, the Payment Plan agreed between them is given in Table-‘A’ below.

Table-‘A’

(Amount in Rs.)

Sr. No.	Payment Stage	% of the total cost
1	At the time of Application	5% of the total cost
2	At the time of Allotment	20% of the total cost
3	Within 6 months of Allotment	12.5% of the total cost
4	Within 12 months of Allotment	12.5% of the total cost
5	Within 18 months of Allotment	12.5% of the total cost
6	Within 24 months of Allotment	12.5% of the total cost
7	Within 30 months of Allotment	12.5% of the total cost
8	Within 36 months of Allotment	12.5% of the total cost

8. The DGAP has also reported that for the computation of the quantum of profiteering, it was pertinent that Para 5 of Schedule-III of the Central Goods and Services Tax Act, 2017 (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 Paragraph 5 of Schedule II of the Central Goods and Services Tax Act, 2017 reads as “(b) 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 been received after issuance of the completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier”. Thus, the input tax credit in respect of those residential units which were under construction, but not yet sold, was provisional and it would have to be reversed by the Respondent, if such units would remain unsold at the time of issue of the completion certificate, in terms of Section 17 (2) & Section 17(3) of the Central Goods and Services Tax Act, 2017, which read as under:

Section 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 this 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”.

Section 17 (3) The value of exempt supply under sub-section (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”.

9. Citing the above provisions, the DGAP has stated that in the instant case, the ITC in respect of those residential units which were under construction but not yet sold is a provisional input tax credit which may be required to be reversed by the Respondent, if such units remain unsold at the time of issue of the completion certificate, in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017.

10. The DGAP has further reported that in line with the above provisions ITC in respect of the unsold units was kept outside the ambit of this investigation but in the case of these units, the Respondent is required to reduce the selling price thereof, to pass on the commensurate benefit of additional ITC corresponding to such units as and when these are sold by him to prospective homebuyers.

11. As regards the allegation of profiteering, the DGAP had reported that before 01.07.2017, i.e., before the GST was introduced, as the service of construction of affordable housing provided by the Respondent was exempt from Service Tax vide Notification No. 25/2012-ST dated 20.06.2012, (as amended by Notification No. 9/2016-ST dated 01.03.2016), the Respondent was not eligible to avail CENVAT credit of Central Excise duty paid on inputs or the Service Tax paid on input services in respect of the residential units being constructed by him in line with CENVAT Credit Rules, 2004. However, the Respondent was eligible to avail the credit of Service Tax paid on input services (CENVAT credit of Central Excise duty was not available) in respect of the commercial shops constructed and sold by him. The Respondent was also eligible to avail the input tax credit of VAT paid on inputs. Further, in the post-GST period, the Respondent became eligible to avail the ITC of GST paid on all inputs and input services, including sub-contracts. DGAP has also reported that from the information submitted by the Respondent for the period from April 2016 to June 2019, the quantum of the input tax credit availed by him and his turnover from the project “Suncity Avenue 102” were tabulated, and based on the same, the ratios of ITC to Turnover for the relevant pre-GST (April 2016 to June 2017) and post-GST (July 2017 to June 2019) periods were worked out, as detailed in the Table-‘B’ below;

Table-‘B’

(Amount in Rs.)

Sr.No.	Particular	Total (Pre-GST) April, 2016 to June, 2017	Taxable Turnover @ 12% GST (01.07.2017 to 24.01.2018)	Taxable Turnover @ 8% GST (25.01.2018 to 30.06.2019)	Total (Post-GST)
1.	CENVAT of Service Tax Paid on Input Services used for the project (A)	0	–	–	–
2.	Input Tax Credit of VAT Paid on Purchase of Inputs (B)	90,31,262	–	–	–
3.	Total CENVAT/Input Tax Credit Available (C)= (A+B)	90,31,262	–	–	–
4.	Input Tax Credit of GST Availed (D)	–	1,06,24,296	3,29,97,020	4,36,21,316
5.	Turnover for Residential Flats as per Home Buyers List (E)	384477456	19,22,38,774	59,25,53,793	78,47,92,567
6.	Total Saleable Carpet Area (Excluding Balcony Area) (in SQF) (F)	3,99,574			3,99,574
7.	Total Sold Carpet Area (Excluding Balcony Area) (in SQF) relevant to turnover (G)	3,76,068			3,86,498
8.	Relevant ITC [(H)= (C)*(G)/(F)] or [(H)= (D)*(G)/(F)]	84,99,974			4,21,93,815
Ratio of Input Tax Credit Post-GST [(I)=(H)/(E)]	2.21%		5.38%

12. Basis the above calculation, the DGAP has reported that ITC as a percentage of turnover that was available to the Respondent during the pre-GST period from April 2016 to June 2017 worked out to 2.21% whereas for the post-GST period from July 2017 to June 2019 it worked out to 5.38%, showing clearly that in the post-GST period, the Respondent has benefited from additional ITC by 3.17% [5.38% (-) 2.21%] of the turnover.

13. The DGAP has further stated that the Central Government had levied GST @ 12% (effective rate) on construction service (after accounting for 1/3rd abatement for land value vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The said effective GST rate on construction service was reduced from 12% to 8% in respect of affordable and low-cost houses up to a carpet area of 60 square meters vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018. Citing the above changes in the rates of tax, the DGAP has reported that keeping in view the issue of changes in the tax rate profiteering in the instant case has been examined by him in two parts, the first part being in respect of the period from 01.07.2017 to 24.01.2018 when the effective GST rate was 12%, and second for the period from 25.01.2018 to 30.06.2019 when the effective GST rate was 8%. The DGAP has added that the profiteering has been computed based on the comparative figures of the ITC to Turnover ratios in the pre-GST and the post-GST periods, the details of which are tabulated in Table-‘C’ below:-

Table-‘C’

(Amount in Rs.)

Sr.No.	Particulars
1.	Period	A	01.07.2018 to 24.01.2018	25.01.2018 to 30.06.2019	Total
2.	Output GST rate (%)	B	12	8
3.	The ratio of Input Tax Credit to Total Turnover as per table – ‘B’ above (%)	C	5.38	5.38	5.38
4.	Increase in input tax credit availed post-GST (%)	D= 5.38% less 2.21%	3.17%	3.17%	3.17%
5.	Analysis of Increase in input tax credit:
6.	Base Price raised from July2017 to June 2019 (Rs.)	E	19,22,38,774	59,25,53,793	78,47,92,567
7.	GST raised over Base Price (Rs.)	F=E*B	2,30,68,653	4,74,04,303	7,04,72,956
8.	Total Demand raised	G=E+F	21,53,07,427	63,99,58,096	85,52,65,523
9.	Recalibrated Base Price	H= E*(1-D) or 96.83% of E	18,61,44,805	57,37,69,838	75,99,14,643
10.	GST @12% or 8%	I = H*B	2,23,37,377	4,59,01,587	6,82,38,964
11.	Commensurate demand price	J = H+I	20,84,82,182	61,96,71,425	82,81,53,606
12.	Excess Collection of Demand or Profiteering Amount	K=G-J	68,25,245	2,02,86,672	2,71,11,917

14. Given the table-‘C’ above, the DGAP has observed that the additional input tax credit of 3.17% of the turnover, or in other words, the benefit in the hands of the Respondent on account of ITC, ought to have resulted in a commensurate reduction in the base price as well as the cum-tax price charged by the Respondent from his homebuyers in terms of provisions of Section 171 of the CGST Act, 2017. The DGAP has further reported that having established the instant case to be a case of profiteering, he has quantified the amount of benefit that ought to have been passed on by the Respondent to his recipients/ homebuyers. The said quantification, which factored the payments received by the Respondent from his recipients/ homebuyers, including Applicant No. 1, for the period from 01.07.2017 to 24.01.2018, has yielded that the total amount profiteered, for the relevant period, by the Respondent worked out to ₹ 68,25,245/- (inclusive of GST calculated on the base profiteered amount of ₹ 60,93,969/-). Similarly, for the period from 25.01.2018 to 30.06.2019, the profiteered amount worked out to ₹ 2,02,86,672/-, (including [email protected]% on the base profiteered amount of ₹ 1,87,83,9551-). Therefore, taking the above two periods together, the total amount profiteered by the Respondent during the period 01.07.2017 to 30.06.2019 came to ₹ 2,71,11,917/- (inclusive of GST).

15. The DGAP has further reported that a scrutiny of the claim of the Respondent regarding his having passed on the ITC benefit to his homebuyers was undertaken by matching the details of his claim against the soft copies of the ‘Tax Invoice cum Demand Letter’ and the Ledger Account Statement issued to the homebuyers. The scrutiny of the above records has revealed that the Respondent has passed on the ITC benefit of ₹ 2,67,88,794/- to 736 homebuyers. The records also reveal that in certain cases, the Respondent has passed on more than commensurate benefit while in the case of other homebuyers, the ITC benefit passed on was less than the commensurate benefit that ought to have been passed on by him. A summary of ITC benefit actually passed on vis-a-vis the requisite commensurate benefit that ought to have been passed on to the home buyers, including Applicant No. 1, is furnished in table-‘D’ below:-

Table-‘D’

(Amount in Rs.)

Sr.No.	Category of Customers	No. of Units	Area (in Sq.ft.)	Amount in Received Post GST	Benefit required to be passed on as per Annex-14	Benefit already passed on by the Respondent	Difference (Profiteering)	Remark
A	B	C	D	E	F	G	H=F-G	I
1.	Applicant No.	1	532	10,51,838	36,356	37,162	-806	No benefit to be passed on as per Annex-14 of the DGAP Report dated 23.03.2020
2.	Homebuyers who have been passed on more than commensurate benefit	715	3,75,536	74,18,34,334	2,56,40,854	2,60,31,762	-3,90,908	No benefit to be passed on as per Annex-14 of the DGAP Report dated 23.03.2020
3.	Homebuyers who were passed on lesser than commensurate benefit	20	10,430	4,19,06,395	14,34,707	7,19,870	7,14,837	Further benefit to be passed on as per Annex-15 of the DGAP Report dated 23.03.2020
Total	736	3,86,498	78,47,92,567	2,71,11,917	2,67,88,794

16. Given the above table “D”, the DGAP has stated that the benefit claimed to have been passed on by the Respondent was less than what should have been passed on in the case of 20 homebuyers (as detailed at Sr. 3 of the above table) by an amount of ₹ 7,14,837/- Further, the DGAP has stated that the benefit claimed to have been passed on by the Respondent is slightly higher than the commensurate benefit, in respect of 716 homebuyers, including the Applicant No. 1 (Sr. 1 & 2 of the above table) by an amount of ₹ 3,91,714/-.

17. The above Report of the DGAP dated 23.03.2020 was considered by this Authority in its meeting held on 28.04.2020 and accordingly, a Notice dated 01.05.2020 was issued to the Respondent to explain why the above-referred Report of the DGAP dated 23.03.2020 should not be accepted and why his liability for violation of the provisions of Section 171 of the CGST Act, 2017 should not be fixed. Further, this Authority, vide Notice dated 01.05.2020, offered the Respondent an opportunity to be heard on 01.06.2020 but due to the Covidl9 outbreak the above-said hearing could not be held. Thus this Authority, vide Order dated 01.06.2020, solicited consolidated written submissions from the Respondent and the Applicant No.1, if any, The Respondent and Applicant No.1 were also informed that personal hearing will be held, preferably through video conferencing, only on specific request. However, the Respondent did not make any specific request for a hearing though he furnished his written submissions vide his replies dated 15.06.2020 and 12.08.2020. Applicant No.1 too furnished his submissions vide his letter dated 12.06.2020.

18. The Respondent vide his submission dated 12.06.2020 has, interalia, stated that:-

a) He had dully followed the Anti-Profiteering law laid down under Section 171 of the CGST Act, 2017 to the best of his knowledge  and belief and accordingly the profiteering element was suo moto passed on by him to his homebuyers by way of commensurate reduction in price; that he had already suo moto passed on ITC benefit amounting to ₹ 2,67,88,794/- to 736 home buyers even before receipt of the ‘notice for initiation of investigation’ by the Director-General of Anti-Profiteering (DGAP).

b) As per para 18 of DGAP Report dated 23.03.2020, the said fact regarding his having passed on the ITC benefit to the tune of ₹ 2,67,88,794/- has been duly verified against the copies of Tax Invoices cum demand letter soft copies of ledger account statement and accepted by DGAP; that Para-18 of the DGAP report dated 23.03.2020 mentioned that out of the total commensurate benefit of ₹ 2,71,11,917/- which ought to have been passed on to the homebuyers, an amount of ₹ 2,678,88,794/- has already been passed on by him; that the DGAP has computed an additional liability amounting to ₹ 7,14,837/-, without adjusting the excess benefit of ₹ 3,91,714/- which he had passed on to his 716 homebuyers; that non-consideration of the excess amount of benefit passed on by him to 716 homebuyers was wrong and unjustifiable.

c) Even if the DGAP’s report dated 23.03.2020 was considered correct, then also his additional liability (the benefit that remained to be passed on to 20 homebuyers) was only ₹ 7,14,837/- and thus the finding of the DGAP, that the total profiteered amount worked out to ₹ 2,71,11,917/- was wrong and unjustifiable; that considering the above fact and the acceptance of the DGAP that substantial portion of the benefit has been passed on by him to his homebuyers, there remained no scope for alleging that he had grossly contravened the provisions of Section 171 of the CGST Act, 2017 and accordingly the Report of the DGAP was incorrect and deserves to be set aside.

19. The Applicant No.1, vide his letter dated 15.06.2020, has also furnished his comments on the Report dated 23.03.2020 of the DGAP and submitted that he acknowledged the fact that the DGAP has minutely observed each detail concerned with this case and that the Respondent has profiteered by an amount of ₹ 2,71,11,971/- whereas he has passed on only ₹ 2,67,88,794/- to 736 homebuyers as the ITC benefit; further that “Para-7 (C) & Para-17 of the DGAP report dated 23.03.2020” conveyed that the Respondent has submitted the soft copies of the acknowledgment of the receipt of the ITC benefit from only 2 of the total 736 homebuyers and that the acknowledgment of receipt of the ITC benefit in respect of the remaining 734 homebuyers has not been furnished by the Respondent to the DGAP, the reason for which needed to be ascertained.

20. The above Applicant has also submitted that the Respondent has also constructed a commercial complex, comprising more than 50 shops within the overall complex/boundary of the project Suncity Avenue 102. The cost of the construction of this commercial complex might have been factored within the overall construction cost of the complete project, i.e. residential and commercial complex and the Respondent could have furnished misleading information regarding the same before the DGAP; that this aspect needed to be checked since the Respondent would have profiteered from the said commercial complex (comprising more than 50 shops that are intended to be sold or leased out separately) that is located within the project and verification of the same was needed to ensure that the benefit has indeed been passed on commensurately to the homebuyers.

21. On receipt of the submissions dated 12.06.2020 of the Respondent and dated 15.06.2020 of Applicant No. 1, this Authority, vide its Order dated 19.06.2020, called for clarifications thereon from the DGAP under Rule 133 (2A) of CGST Rules 2017. In response, the DGAP, vide his letter 09.07.2020, has submitted a point wise reply on the above said submissions made by Respondent and Applicant No. 1, which are as below-

(i) The Respondent’s contention that the computation of the profiteering should have taken into account the excess benefit passed on by him to 716 buyers and adjusted the same against the benefit yet to be passed on to the other homebuyers, is untenable since the computation of profiteering is done in several steps -(i) the first step was to determine whether profiteering was attracted and if yes then what was the total amount of profiteering (ii) the second step was to identify the amount which would be passed on to each recipient/ homebuyer; that it was observed that out of a total profiteer amount of ₹ 2,71,11,917/- an amount of ₹ 2,67,88,974/- was passed on by the Respondent to 716 homebuyers as ITC benefit; that however, further verification revealed that the Respondent had passed on excess (more than commensurate) benefit to certain customers whereas he had not passed on the commensurate benefit to 20 customers, which implied that these 20 customers have been deprived of the commensurate benefit which ought to have been passed on to them in terms of the provisions of Section 171 of CGST Act, 2017; further that there was no provision in the statute for considering the adjustment of excess benefit passed on to certain homebuyers/ recipients against the others who have been deprived of the commensurate benefit, anywhere, in the anti-profiteering provisions since each homebuyer/recipient was individually entitled to the ITC benefit on account of the increased availability of ITC.

(ii) In response to the submissions of the Applicant, the DGAP has reported that the Respondent has furnished soft copies of all the invoices wherein the ITC benefit has been passed on by the Respondent to the homebuyers and this fact has been reflected in Paras 17 & 18 of the DGAP Report dated 23.03.2020; that a verification of the documents furnished by the Respondent has revealed that the Respondent has passed on the benefit of ITC as claimed by him; further, that the Respondent had informed the DGAP during the process of investigation that he has constructed 761 residential flats apart from 51 commercial shops; that since none of the shops in the commercial complex was sold during the period of investigation, the turnover and area of the commercial complex has not been taken into consideration while computing the profiteering in respect of homebuyers/ consumers of the residential complex; that, accordingly, the benefit of ITC that needed to be passed on to the homebuyers has been computed considering total ITC available to the Respondent in respect of the project ‘Suncity Avenue-102′ and the said benefit has been allocated amongst the 736 homebuyers, keeping in mind that out of the 761 residential units, only 736 residential units were sold and other units remained unsold in the relevant period.

22. The abovesaid clarification of the DGAP dated 09.07.2020, was forwarded by this Authority vide its Order dated 14.07.2020, to the Respondent and Applicant No. 1, inviting their submissions, if any, by 28.07.2020. However, neither the Respondent nor Applicant No. 1 filed any submissions till the specified date. In the interest of justice, this Authority, vide its Order dated 29.07.2020, gave the Respondent and the Applicant No.1 further time to submit comments on the clarifications dated 09.07.2020 of the DGAP. In response, the Respondent has informed that due to the Corona Virus pandemic, he could not make his submissions in time and requested additional time to make his submission. The Authority allowed the request for the additional time made by the Respondent and accordingly, vide its Order dated 21.09.2020, asked the Respondent to submit his consolidated reply along with a short executive summary of his submissions on the matter by 30.09.2020. In response to the same, the Respondent, vide his reply dated 30.09.2020, submitted that he had already submitted all the necessary information, contentions, and documents on the matter and requested the Authority to disposal of the case giving due credence to his suo-moto action of having passed on the ITC benefit to his homebuyers/ recipients. Applicant No. 1 has not filed any further submissions until date.

23. This Authority carefully considered the Reports filed by the DGAP, the submissions of the Respondent, and the Applicant No. 1, and other case records. This Authority took cognizance of the contention of Applicant No. 1 regarding the passage of benefit to homebuyers and observed that the DGAP Report mentioned the claim of the Respondent that he has passed on the benefit of ITC to 736 homebuyers (including those cases where the benefit passed on was less than commensurate) but it is a fact that the Respondent has furnished the copies of ‘acknowledgment’ of the receipt of ITC benefit from only 2 out of the 736 home buyers as the material evidence to corroborate his above claim. Hence, this Authority, vide its Order dated 06.11.2020, directed the DGAP to verify whether the ITC benefit has been duly passed on by the Respondent to 74 randomly selected homebuyers (approx 10% of the total number of homebuyers) from the Homebuyers list annexed to the Report of the DGAP dated 23.03.2020 and to submit his Report in line with Rule 133 (2A) after verification. The list of the randomly selected 74 homebuyers along with their residential unit details, is given in the Chart below:-

CHART

S.No.	Customer Name	Unit No.
1	Prerit Kumar	A1001
2	Satish Kumar	A1204
3	Abhai Singh	A201
4	Taruna Pundeer	A406
5	Virender Kumar	A503
6	Sudhanshu Thapliyal	A901
7	Bal Kishan Gogia	A904
8	Sunil Kumar	A908
9	Suraj Devi	B004
10	Sheela Devi	B1008
11	Rajender Singh	B103
12	Bidya Bhushan Bhartiya	81204
13	Gunjan Dewan	81205
14	Devender Yadav	B204
15	Suresh Kumar & Surinder Kumar	B703
16	Jasvir Singh Yadav	8707
17	Ravi Kumar	C003
18	Ekta Yadav & Jitender Yadava	C1002
19	Surender Pahuja & Puja Pahuja	C1007
20	Sumit Gahlot	C108
21	Vidhi Chaturvedi	C1104
22	REKHA VIKRAM SINGH	C1204
23	Kaneez Fatma	C1208
24.	MOHAN LAL KAUSHAL & MEENU KAUSHAL	C205
25	Shalender Gupta	C208
26	Sushma Dutta	C305
27	Mayank Bhatnagar & Anita Bhatnagar	C402
28	Raman Kumar & Shakuntla	C407
29	Madhvi Sharma	C503
30	Aman Rekhi	C601
31	Satish Yadav & Meenu Yadav	C605
32	Vishal Agarwal	C608
33	Urmila Singh Sengar	C704
34	Surender Kumar	C801
35	Vijender Kumar	C805
36	Sahil Garg	C902
37	Ankur Khunger	D108
38	Dharmender Singh Yadav	D1101
39	Pushpa Bisht & Prakash Singh Bisht	D1108
40	Mayank Arora	D1201
41	Nidhi Thakur	D203
42	Neeraj Aggarwal	D307
43	Shivam Gupta	D708
44	Ashok Kumar Adlakha & Geeta Adlakha	D907
45	Mamta Rani	E1004
46	Vishal Garg	E106
47	Ruchika Madaan	E107
48	Pranshu Dutt	E204
49	Ratnalu Srinivas Rao	E401
50	Piyush Sharma	E407
51	Akshay Yadav	E505
52	Kamlesh Gogia	E604
53	Baldev Singh Thakur	E702
54	Rahul Goyal	E707
55	Sumit Chhabra & Neha Chhabra	E805
56	Satya Narain	F401
57	Prideman Krishen Handoo	F604
58	Amar Singh Nirwan	F802
59	Somnath Batra	F807
60	Hari Chand	G007
61	Rahul Gupta	G1001
62	Virender Singh Dhakwal	G1007
63	Sachin Agarwal	G202
64	Radhika Swarup	G207
65	Bhubhan Kumar Sahu & Jharna Pradhan Sahu	G306
66	Rashmi Mahajan	H101
67	Mohammed Raza Khan	H102
68	Aarushi Dhingra	H1105
69	Amit Tyagi	H204
70	lnderjeet Miglani Yogesh Kumar	H303
71	Saral Sahani	H601
72	Sushant Sachdeva	H608
73	Piyush Verma	H701
74	Vandna Arora	H803

24. The DGAP, vide his clarificatory Report dated 17.11.2020, has reported that the original copies of the ‘Acknowledgement cum no-grievance letters’ and the ‘Ledger Account’ in respect of the 74 homebuyers, randomly selected by this Authority, were verified and that the Respondent has duly passed on the ITC benefit to the 74 homebuyers.

25. We have carefully considered the submissions of Applicant No. 1, the contentions made by the Respondent, and the case records and we observe that the investigation has correctly established that the Respondent has violated provisions of Section 171 (1) of CGST Act 2017 since the benefit derived by the Respondent on account of additional ITC in the post-GST period from 01.07.2017 to 30.06.2019 was not passed on by him to his homebuyers/ recipients commensurately as required under Section 171 of the CGST Act,

2017. While deciding the matter on the above lines, we dismiss, as untenable, the contention of the Respondent that the excess (more than commensurate) benefit amounting to ₹ 3,91,714/- passed on by him to 716 homebuyers/ recipients be adjusted against the ‘less than commensurate’ benefit passed on to the other 20 homebuyers/recipients because the provisions of Section 171 of the  CGST Act, 2017 apply to each supply which implies that each homebuyer/ recipient is entitled to the commensurate benefit due to him in respect of the residential unit supplied to him. The adjustment sought by the Respondent, if agreed, would result in depriving the aforementioned 20 homebuyers of the benefit which would be against the legislative intent of Section 171 (1) of the CGST Act, 2017 and is hence not acceptable.

26. We thus observe that whereas the Respondent was required to pass on the ITC benefit of ₹ 2,71,11,917/- (including GST), in respect of the period July 2017 to June 2019, in terms of provisions of Section 171 of the CGST Act, 2017, he has only passed on ₹ 2,67,88,794/- (including GST) to his homebuyers and that the remaining amount of ITC benefit that remains to be passed on to 20 homebuyers (as detailed in Table D of this Order amounts to ₹ 7,14,837/- Hence we take the view that in compliance with the provisions of Section 171 of the CGST Act, 2017, the Respondent is required to pass on ITC benefit amounting to ₹ 7,14,837/- (inclusive of GST) to the twenty homebuyers as detailed at Sr. No. 3 of Table D of this Order. The Respondent is thus directed to pass on the above amount to the said homebuyers within a period of three months of this Order.

27. Further, it is also revealed from the submissions of the Respondent that he has not passed on interest @18% on the profiteered amount to his homebuyers, including Applicant No. 1 and the 20 homebuyers who are yet to receive the commensurate benefit. Hence, in line with the provisions of Section 171 (1) of the CGST Act, 2017 read with Rule 133 (3) (b) of the CGST Rules, 2017, we order that the applicable interest shall be paid by the Respondent to his homebuyers from the date of receipt of the additional amount of consideration in the hands of the Respondent till the amount is paid to each buyer, as the Respondent has used this amount in his business. Accordingly, the DGAP is directed to ensure that the interest, at the applicable rate, is paid to the eligible home buyers and submit his report confirming payment of the interest within three months of this Order. In case the interest is not paid the same shall be recovered by the concerned CGST/SGST Commissioner and paid to the eligible buyers.

28. While deciding this matter, we also take into consideration the fact that till the end of the period of investigation, i.e. till July 2019, only 736 of the 761 residential units had been sold and none of the shops in the commercial complex had been sold during the period of investigation. Further, we observe that the present investigation of the DGAP was only up to 30.06.2019. Hence, any additional benefit of ITC, which shall accrue subsequently to the respondent, shall also be passed on to the eligible homebuyers by the Respondent. Further, the total additional ITC that will be finally available to the Respondent cannot be determined at this stage since the construction of the project is yet to be completed. Therefore, we order that the DGAP shall carry out a comprehensive investigation of the said project of the Respondent from the perspective of Section 171 of the CGST Act 2017 at the time of issue of occupancy certificate.

29. Further, this Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Haryana to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the CWFs of the Central and the Haryana State Government as per the details given above. A report in compliance of this order shall be submitted to this Authority by the concerned Commissioner within a period of 4 months from the date of receipt of this order.

30. A copy each of this order be supplied to Applicant No. 1, the Respondent, and the Commissioner CGST/SGST Haryana for necessary action. File be consigned after completion.