No Profiteering if Contractor Voluntarily Passed GST ITC Benefit to Indian Oil Corp. after Tax Reduction: GSTAT [Read Order]
GSTAT affirmed the computation by the DGAP and noted that no profiteering occurred when the contractor had duly remitted residual ITC.
![No Profiteering if Contractor Voluntarily Passed GST ITC Benefit to Indian Oil Corp. after Tax Reduction: GSTAT [Read Order]](https://images.taxscan.in/h-upload/2025/11/10/2103893-gst-itc-indian-oil-corp-tax-reduction-gstat-taxscan.webp "No Profiteering if Contractor Voluntarily Passed GST ITC Benefit to Indian Oil Corp. after Tax Reduction: GSTAT [Read Order]")
The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi recently held that no anti-profiteering action is warranted when a contractor has voluntarily transferred the residual input tax credit (ITC) benefit identified by the Directorate General of Anti-Profiteering (DGAP), to the principal - here being the Indian Oil Corporation Ltd. (IOCL).
The present dispute originated from a complaint by IOCL (Pipeline Division), Rajkot, alleging that M/s Gopal Teknocon Pvt. Ltd. (Gopal Teknocon), the contractor for maintenance and inspection of crude oil storage tanks had failed to pass on ITC benefits after the GST was introduced in 2017.
The Standing Committee referred the matter to the DGAP which investigated the period from July 1, 2017 to July 31, 2020 and submitted reports to the erstwhile National Anti–Profiteering Authority (NAA) and subsequently to GSTAT following extensive reinvestigation.
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DGAP’s comparative analysis from the post and pre-GST periods revealed that Gopal Teknocon had availed post-GST ITC of ₹85,26,685 against a notional pre-GST VAT credit of ₹58,48,993, yielding an incremental benefit of ₹26,77,692.
Of this, ₹23,22,494 was already passed on by contractual discounts, resulting in a residual balance of ₹3,55,198 left to be remitted to IOCL. The DGAP recommended transfer of that residual amount to ensure full compliance with Section 171(1).
Following the dissolution of the NAA, the matter was transferred to the GSTAT. Gopal Teknocon, through its Director, filed a written submission dated October 14, 2025, acknowledging DGAP’s quantification and confirming that a demand draft for ₹3,55,198 had been prepared in favour of IOCL
The respondent further sought closure of proceedings, contending their bonafide compliance and cooperation with the proceedings.
Anil Kumar Gupta (Technical Member) examined the DGAP report, the directions given by the NAA and the submissions made by the respondent to observe that the DGAP’s computation stood unchallenged and that the voluntary transfer satisfied the remedial object of anti-profiteering law.
The GSTAT noted that there would be a regulatory purpose in continuing proceedings once the benefit had been passed on and verified. Consequently, the Bench affirmed the DGAP computation and recorded that the respondent had fulfilled all of its obligations under Section 171(1) and closed the investigation while directing the respondent to file proof of payment with IOCL and the jurisdictional commissionerate within fifteen days.
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