National Anti-profiteering Authority (NAA) under GST

by Legal Suvidha



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The Union Cabinet on Thursday approved setting up of the proposed National Anti-profiteering Authority (NAA) under the goods and services tax (GST) to ensure consumers get the benefit of lower taxes under the new indirect tax regime. The decision came a day after the reduction in the GST rate on over 200 items came into force. 

The government said the Cabinet decision was “following up immediately on yesterday’s (November 15) sharp reduction in the GST rates of a large number of items of mass consumption”. 

The five-member anti-profiteering authority will have power to ask those not passing on the tax benefit to return the undue profit earned to consumers along with an 18% interest, reduce prices and if the consumer is not identifiable, deposit the amount in a Consumer Welfare Fund. 

In grave cases of abuse, NAA can impose a penalty and even cancel GST registration. 

The body is expected to be set up soon. There have been reports that many restaurants have not passed on the rate cut. 

The GST Council had last week decided to slash tax rates of over 200 items and also lowered tax rates on AC and non-AC restaurants to 5% from 18%. 

The tax on as many as 178 items was cut from 28% to 18%, including that on chocolates, electric lighting and fans, furniture and detergents, etc. There are only 50 items in the highest 28% slab. 

“This paves the way for the immediate establishment of this apex body, which is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices,” the statement said.

“The National Anti-Profiteering Authority is an assurance to consumers of India. If any consumer feels that the benefit of tax rate cut is not being passed on, then he can complain to the authority,” said Union minister Ravi Shankar Prasad after the Cabinet meeting. 

 Subsequently, a five-member committee, headed by Cabinet secretary PK Sinha, revenue secretary Hasmukh Adhia, CBEC chairman Vanaja Sarna and chief secretaries from two states, has been tasked to select the chairman and the members of the authority. 

The anti-profiteering authority is envisaged as an interim body that will function only for two years from the date on which the chairman assumes charge. 

Under the anti-profiteering mechanism approved, there will be a statelevel ‘screening committee’ and a ‘standing committee’ at the national level. All the complaints of profiteering will first go to these bodies, those of local nature to the screening committee and national level to the standing committee. 

If these two bodies find merit in the complaints, they can refer them for further investigation to the directorate general of safeguards (DGS). The DGS would need to submit a report within three months to complete the investigation and send the report to the anti-profiteering authority. The authority will decide on the methodology to evaluate if the benefits of lower taxes under GST including those arising due to seamless input tax credit have not been passed to the consumer. 

 

 



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