New Delhi: Close on the heels of the reduction in the GST rates of a large number of items of mass consumption, the Union Cabinet chaired by Prime Minister Narendra Modi today approved the creation of the posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under GST.
The National Anti-profiteering Authority 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 NAA, will be headed by a senior Government of India Secretary-level officer with four Technical Members from the Centre and/or the States.
Effective from midnight of 14 November, 2017, the GST rate has been slashed from 28% to 18% on goods falling under 178 headings. There are now 50 items which attract the GST rate of 28%. Similarly, GST rates of a large number of items have been reduced from 18% to 12% and some goods have been completely exempted from GST.
The “anti-profiteering” measures inbuilt in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers. This institutional framework comprises the NAA, a Standing Committee, Screening Committees in every State and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).
Affected consumers, who feel the benefit of commensurate reduction in prices is not being passed on when they purchase any goods or services, may apply for relief to the Screening Committee in the particular State. However, in case the incident of profiteering relates to an item of mass impact with ‘All India’ ramification, the application may be directly made to the Standing Committee. After forming a prima facie view that there is an element of profiteering, the Standing Committee shall refer the matter for detailed investigation to the Director General of Safeguards, CBEC, which shall report its findings to the NAA.
If the NAA confirms there is a necessity to apply anti-profiteering measures, it has the authority to order the supplier/business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services. If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund. In extreme cases, the NAA can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.