No GST Anti-Profiteering When Price for Works Contract was Fixed after GST Rollout & Work Commenced Post-GST: GSTAT [Read Order]

In a recent ruling, the Goods and Services Tax Appellate Tribunal (GSTAT), Principal Bench, Court III, held that Associates did not profiteer under Section 171 ofthe Central Goods and Services Tax Act, 2017, in relation to the works contract for “Modernization of MICT” awarded by Mumbai Port Trust Authority.

The case arose under Section 171 of the CGST Act, which deals with anti-profiteering. The allegation was that Belhekar & Kale Associates had failed to pass on the benefit of input tax credit after the introduction of GST through a commensurate reduction in price.

The application was filed by Mumbai Port Trust Authority under Rule 128 of the CGSTRules, 2017. The matter was referred by the Standing Committee on Anti-Profiteering to the Directorate General of Anti-Profiteering (DGAP) for investigation under Rule 129.

The DGAP investigated the matter and submitted its report dated 21 January 2026. It found that the tender for the work was floated on 25 May 2017, before GST came into force. However, the Letter of Acceptance was issued on 8 August 2017 and the work commenced on 3 February 2018, both after GST was implemented on 1 July 2017.

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The DGAP observed that there was no procurement of inputs or execution of work in the pre-GST period. Since the entire procurement and execution took place after GST, there was no basis for comparing pre-GST and post-GST input tax credit benefit.

The DGAP also observed that the case was not related to sale of flats or homes by a builder. It involved a works contract executed by a private firm for a government agency under a detailed tender. The DGAP pointed out that Mumbai Port Trust Authority had withheld Rs. 22.66 crore from the bills of the respondent on account of alleged profiteering, without authority under Section 171 of the CGST Act.

The applicant did not appear before the tribunal during the hearings. The matter was listed on 24 February 2026, 2 April 2026 and 29 April 2026. Despite notices sent by email and post, the applicant did not file any written submission or objection to the DGAP report.

The respondent’s representative argued that the DGAP report should be accepted. Thye submitted that sufficient opportunities had been given to the applicant, but no objection was filed by it.

Anil Kumar Gupta (Technical Member) observed that the applicant failed to appear and did not file any objection despite repeated opportunities. The tribunal observed that it had no option but to decide the matter on the basis of the DGAP report and documents available on record.

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The tribunal observed that the Letter of Acceptance and commencement of work were both after the introduction of GST. It also observed that no procurement or work execution had taken place before GST. Because of this, there was no additional ITC benefit which could be compared between the pre-GST and post-GST periods.

The tribunal relied on the Delhi High Court ruling in Reckitt Benckiser India Pvt. Ltd. v. Union of India and explained that where the contract price was fixed after taking into account the post-GST tax structure, no separate ITC benefit was required to be passed on.

The tribunal accepted the DGAP’s finding that Belhekar & Kale Associates had not contravened Section 171 of the CGST Act. It ruled that there was no profiteering in the works contract for “Modernization of MICT” and closed the anti-profiteering proceedings.

The tribunal directed that a copy of the order be sent to the respondent, the applicant and the jurisdictional CGST/SGST Commissioner for information and necessary action.

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