Case Law Details
Indian Oil Corporation Ltd. Vs Gopal Teknocon Private Limited (NAA)
It is accepted fact that petroleum products play a very important role in day-to-day life of an individual and also fuel the economy. It is also well-known fact that refining and further processing and delivery of the petroleum product is a continuous process and any delay on account of any activity/construction/service may have a far reaching consequences, which would not only disrupt the supply chain but also pose safety hazards to the people and may also cause environmental concerns. The Applicant No. 1 i.e. IOCL in it’s letter dated 13.04.2022 has highlighted the need for placing the order of supply on the Respondent and have contended that they had no option of inviting fresh tenders but to go along with tender which was floated, before the implementation of GST. The IOCL i.e. Applicant No. 1 in their letter dated 13.04.2022 have worked out the amount of discount which should have been provided to them by the Respondent.
The benefits of tax reduction and ITC under the provisions of Section 171 (1) of the CGST Act, 2017 are being granted by the Central and the State Governments out of the public exchequer and not from the accounts of the suppliers and hence they are to be passed on as per the mandate of the above provisions by commensurate reduction in the prices. Although the supplier and the recipient can negotiate the prices to be charged at the time of the supply of goods and services, however, the terms and conditions of negotiation would be dependent upon facts/factors prevailing at the relevant time and also prevailing circumstances. The Applicant No. 1 i.e. IOCL has brought before the Authority vide letter dated 13.4.2022 various facts and the situation under which, the negotiation was carried out and the need to continue with the instant tender, it would be prudent that the various points/facts brought out in the said letter dated 13.4.2022 are examined.
The DGAP vide Para 18 (e) of his Report has also stated that the Respondent had not made any purchases in the pre GST era and hence there was no availability of CENVAT/VAT which could be compared with the ITC of post GST era. In this regard it would be appropriate to mention that the Respondent has himself claimed to have passed on benefit of ITC to the Applicant No. 1 amounting to Rs. 23,22,493.68/- in respect of both the Contracts. It is quite apparent from the submissions of the Respondent relied upon by the DGAP in his Report that he has computed the above amount by comparing the tax rates prevalent during the pre GST period and the ITC available on VAT. Therefore, it was incumbent upon the DGAP to investigate whether the methodology and the computations of the benefit of GST so made by the Respondent were correct or not and submit his findings to this Authority.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
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