No Further Anti–Profiteering Action Required Once Contractor Remits Residual ITC Benefit: GSTAT New Delhi

The Goods and Services Tax Appellate Tribunal (GSTAT), Principal Bench at New Delhi, has held that when a contractor voluntarily remits the residual input tax credit (ITC) benefit identified by the Directorate General of Anti‑Profiteering (DGAP) to its principal, no separate anti-profiteering action is required under Section 171 of the Central Goods and Services Tax Act, 2017 (CGST Act). A Bench of GSTAT, Principal Bench, comprising of Justice Sh. Anil Kumar Gupta (Technical Member) was hearing appeal filed by the Directorate General of Anti‑Profiteering (DGAP) on the issues: whether the respondent failed to pass on the benefit of ITC or tax‐rate reduction to its recipient in violation of Section 171(1) CGST Act and the Anti-Profiteering Rules; whether DGAP's computation is acceptable; The case originated from a complaint by the Indian Oil Corporation Ltd. (Pipeline Division, Rajkot) alleging that Gopal Teknocon, which was engaged as its contractor for maintenance and inspection of crude oil storage tanks, failed to pass on the benefit of incremental input tax credit (ITC) following the introduction of GST, as required under Section 171(1) (anti-profiteering measures) of the Central Goods and Services Tax Act, 2017 (“CGST Act”). The Standing Committee on Anti-Profiteering referred the matter to DGAP for investigation. DGAP observed that the Respondent failed to pass the benefit of incremental ITC post GST. Also, the Respondent acknowledged the computation of DGAP in the written response before the GSTAT and complied with its obligation. The Bench observed that the respondent has complied with its obligation under Section 171(1) of the CGST Act, affirmed DGAP's computation, and closed the investigation stating no further action under anti-profiteering rules was found necessary. The Bench stated it is further noted that anti- profiteering provisions are remedial in nature and aimed at consumer welfare, rather than punitive. Once the benefit quantified has been duly passed on to the beneficiary and compliance verified, continuation of proceedings serves no regulatory purpose. Case Titled: DGAP Vs. Gopal Teknocon Pvt. Ltd. Case No: NAPA/15/PB/2025 Click Here To Read/Download Order

No Further Anti–Profiteering Action Required Once Contractor Remits Residual ITC Benefit: GSTAT New Delhi

Rajnandini Dutta

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