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NAPA ordered recalculation of profiteering amount as ITC already blocked by State Authorities

May 21, 2020[2020] 116 taxmann.com 704 (NAA)
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GST : Applicant buyer had filed an application alleging profiteering in respect of construction service supplied by respondent in its commercial project 'U FARIA'. It was alleged that respondent had not passed on benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in price of shop. DGAP on investigation concluded that post-GST, respondent had benefitted from additional ITC to tune of 1.74 per cent of turnover which was required to be passed to applicant and other recipients which had not been passed on and thereby provisions of section 171 had been contravened. Profiteered amount was calculated at Rs. 24.78 lakhs

• Respondent however, submitted that Rs. 1.78 crores of ITC had been blocked by State GST authorities and therefore, could not be utilised for discharging his output liability. Therefore, respondent could not be said to have obtained additional benefit of said amount in post GST period and accordingly DGAP was to be directed to carry out further investigation with respect to blocked ITC and to submit fresh report after detailed investigation within time specified.

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