DGAP Vs Gopal Teknocon Pvt. Ltd (GSTAT)
The present case before the GST Appellate Tribunal (GSTAT) arose from a detailed investigation report dated 31 August 2022, submitted by the Directorate General of Anti-Profiteering (DGAP) under Rule 129(6) and Rule 133(4) of the Central Goods and Services Tax (CGST) Rules, 2017. The matter concerned M/s Gopal Teknocon Private Limited and M/s Indian Oil Corporation Limited (IOCL) regarding alleged non-passing of Input Tax Credit (ITC) benefits related to a contract for maintenance and inspection of crude oil storage tanks. The proceedings were initiated under Section 171 of the CGST Act, 2017, which mandates that any benefit arising from ITC or tax rate reduction must be passed on to the recipient by way of commensurate price reduction.
The complaint originated from IOCL’s Pipeline Division, Rajkot, which alleged that the Respondent, Gopal Teknocon Pvt. Ltd., had failed to pass on the benefit of ITC after implementation of GST in respect of contracted works. The Standing Committee, after review, referred the matter to the DGAP on 7 August 2020. Subsequently, the DGAP issued a Notice of Investigation on 4 September 2020, covering the period from 1 July 2017 to 31 July 2020.
After completing the initial investigation, the DGAP submitted its first report dated 29 January 2021 before the National Anti-Profiteering Authority (NAA). The DGAP concluded that there was no evidence of profiteering since IOCL had voluntarily agreed to the post-GST pricing and contract modifications. However, the NAA, vide Interim Order No. 03/2022 dated 10 May 2022, directed a re-investigation under Rule 133(4) of the CGST Rules. The Authority sought clarification on whether the discounts given by the Respondent were specifically linked to the GST benefit and whether the adopted methodology accurately reflected the passing on of ITC benefits.
