In a recent case under the Competition Commission of India ( CCI ) it was decided that as the Respondent did not profit through extra GST Input Tax Credit, hence it is not obligatory to pass on ITC benefits.
The Director General of Anti- Profiteering ( DGAP ) on 24.03.2021 had sent a report to the National Anti- Profiteering Authority ( NAA ) after an investigation under Rule 133(4) of the Central Goods and Service Tax ( CGST ) Rules.
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The NAA vide its order determined profiteered amount of Respondent’s project “Devaan” as Rs 4,83,04,691/- in respect of both residential flats and commercial shops for the period 01.07.2019 to 30.06.2019.
NAA directed DGAP under Rule 133(4) to further investigate the quantum of ITC benefit which the Respondents, Pivotal Infrastructure Pvt. Ltd, was required to pass on to the home/shop buyers or till the Completion Certificate ( C.C. ) is obtained, whichever is earlier.
It was submitted that the respondent had filed VAT Returns and Assessment Order, wherein the ITC on the purchase of Inputs was allowed to the tune of Rs. 2,14,55,660/- and Rs 32,89,447/- respectively.
It appeared that the respondent was eligible to avail ITC of VAT paid on the inputs. For the purpose of computation of profiteering, the ratio of ITC to turnover available to the Respondent in pre- GST periods compared with the same in GST period.
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In this case the NAA upheld the ratio of ITC’s to turnovers during the pre GST period and GST period. Therefore recomputation wasn’t required.
The Commissioner considered the DGAP report and decided to allow the Applicant No.1 Smt. Honey Macker, to file her consolidated written submissions against the DGAP’s Report to explain why the report shouldn’t be accepted.
The Applicant No.1 did not reply to the notice, the commissioner gave one last opportunity to file written submissions against the DGAP’s report vile email. However the applicant failed to reply.
No one appeared on behalf of the Applicant No.1 hence the commission was left with no other option but to proceed ex-parte against the applicant.
The Competition Commission of India ( CCI ) comprising the Chairperson Smt. Ravneet Kaur, and members Ms. Sweta Kakkad and Sh. Deepak Anurag observed that with respect to project “Devaan” ITC as percentage of turnover that was available to respondents during the pre-GST period ( April, 2016 to June, 2017 ) was 0.31% and during GST period 01.07.2019 to 06.03.2020.
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The commission also submitted that the case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Therefore the proceedings initiated against the Respondent under Rule 133 (4) of the CGST Rules, 2017 were dropped.
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