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

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.