Contractor Met Section 171(1) Duty by Paying Residual ITC Benefit | GSTAT

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Section 171(1) ITC benefit

Case Details: DGAP vs. Gopal Teknocon (P.) Ltd. - [2025] 180 taxmann.com 250 (GSTAT-NEW DELHI)

Judiciary and Counsel Details

  • Anil Kumar Gupta, Technical Member

Facts of the Case

The applicant, a contractor providing maintenance and inspection services for crude oil storage tanks, was investigated following a complaint by an oil PSU alleging that it had failed to pass on the incremental ITC benefit resulting from the GST transition through corresponding price reductions in the contract. The Standing Committee referred the matter to the Director-General of Anti-Profiteering (DGAP) for investigation. It was identified that a portion of the incremental ITC benefit arising from the transition had not been passed to PSU. The matter was placed before the GST Appellate Authority (GSTAT).

GSTAT Held

The GSTAT held that the DGAP’s computation of the residual ITC benefit was correct and unchallenged, and that the applicant had voluntarily remitted the outstanding amount to the recipient. It was observed that Section 171(1) of the CGST Act imposes an anti-profiteering obligation that is remedial in nature and aimed at protecting consumers. With the residual ITC benefit fully transferred, the statutory objective under Section 171(1) was satisfied. The GSTAT upheld DGAP’s computation and confirmed that the applicant had fulfilled all obligations.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied