The National Anti-Profiteering Authority ( NAA ) in a complaint filed against M/s Adani M2K Projects LLP held them to be guilty of profiteering with the amount so profiteered as computed by the DGAP in absence of challenge to the computation.
The applicant alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price.
Haryana State Screening Committee observed that due to the non-availability of ITC on input materials, the Respondent’s tax burden has been reduced which needed to be passed on to the customers, after which the same was referred to DGAP. The DGAP in its report claimed that in the pre-GST regime, the respondent was eligible to avail CENVAT credit of Service Tax paid on input services. However, CENVAT credit of Central Excise Duty paid on the inputs was not admissible as per the CENVAT Credit Rules, 2004. In a comparative analysis, the DGAP found out that the ITC as a percentage of turnover that was available to the Respondent during the pre-GST period was 5.57% and during the post-GST period was 7.08% clearly confirming that the respondent benefitted from additional ITC after GST imposition.
The Quorum constituting of members: Sh B.N. Sharma as the Chairman, Sh J.C. Chauhan and Sh Amand Shah confirming the finding of the DGAP held that the Respondent had benefitted from additional ITC to the tune of 1.51% of his turnover and the same is required to be passed on by him to the eligible flat buyers.
The present Authority further took note of the fact that the Respondent had not agreed to pass on the ITC benefit to the recipients and that the amount of profiteering computed by the DGAP was held as correct.
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