National Anti-Profiteering Authority Under GST (Important) (Download PDF)

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Union Cabinet gave approval for posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under GST, following up immediately on sharp reduction in the GST rates of a large number of items of mass consumption.

Image of Anti-profiteering Provisions of GST

Image of Anti-Profiteering Provisions of GST

Image of Anti-profiteering Provisions of GST

Mandate of NAA

  • Ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers through reduction in prices.

  • NAA will be headed by a senior officer of the level of Secretary to the Government of India with four Technical Members from the Centre and States.

  • Reassures consumers that Government is fully committed to take all possible steps to ensure the benefits of implementation of GST in terms of lower prices of the goods and services reach them.

Background

  • On midnight of 14th November, 2017 the GST rate was slashed from 28 % to 18 % on goods falling under 178 headings with only 50 items now attracting rate of 28%.

  • Large number of items saw reduction in GST rates from 18 % to 12 % and some goods are now completely exempt from GST.

  • With the reduction in GST rates, it is possible that companies and businesses keep the benefit to themselves and not pass it on to consumer.

  • Anti-profiteering measures protect the consumer against such acts

“Anti-Profiteering” Measures

  • Anti-profiteering measures are enshrined in the GST law

  • They provide 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.

  • 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).

How to Report Violation

  • Consumers with complaints on reduction on prices not being passed apply for relief to the Screening Committee in the particular State.

  • If profiteering relates to an item of mass impact with “All India” ramification, the application may be directly made to the Standing Committee.

  • After prima facie review Standing Committee refers the matter for detailed investigation to the Director General of Safeguards, CBEC, which report its findings to the NAA.

  • When NAA confirms necessity to apply anti-profiteering measures, it can order the supplier and business concerned to reduce its prices or return the undue benefit along with interest to the recipient of the goods or services.

  • If undue benefit cannot be passed to the recipient, it has to be deposited in the Consumer Welfare Fund.

  • In extreme cases NAA imposes a penalty and even orders the GST registration cancellation.

- Published/Last Modified on: November 18, 2017

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