GSTAT Upholds DGAP Findings; Rs. 9.36 Lakh Profiteering Payable to NTPC

The proceedings arose from an investigation by the Director General of Anti-Profiteering (DGAP) against Kanwar Enterprises Pvt. Ltd. regarding construction services for the “Ash Dyke Stage-II A, NTPC Tanda Thermal Power Project” in Uttar Pradesh. The complaint was filed by NTPC Ltd. alleging failure to pass on the benefit of additional Input Tax Credit (ITC) and reduced tax burden after implementation of GST from 01.07.2017, as required under Section 171 of the CGST Act, 2017.

The DGAP found that certain goods became eligible for ITC post-GST and recalculated the tax incidence. Total profiteering was computed at Rs. 12,20,694/-. As 76.735% of the post-GST contract value (Rs. 97.66 crore out of Rs. 127.27 crore) had been executed, proportionate profiteering of Rs. 9,36,700/- was attributed to completed work. Both the Respondent and NTPC accepted the DGAP’s findings.

Main Issue: Whether the Respondent contravened Section 171 of the CGST Act by failing to pass on GST-related benefits to NTPC.

Tribunal’s Order: The Tribunal held that the DGAP had correctly determined the total profiteered amount at Rs. 12,20,694/- arising from additional ITC and reduced tax burden under GST. Since a substantial portion of the work had already been executed, the proportionate amount of Rs. 9,36,700/- was directed to be passed on to NTPC, with the balance to be adjusted in future billing.

The Respondent was directed to pay applicable interest on the profiteered amount. The amount of Rs. 9,36,700/- along with interest was ordered to be deposited within 30 days, with compliance to be reported to the jurisdictional CGST/SGST Commissioner and the DGAP.

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