Explained: National Anti-Profiteering Authority

The Central GST Act provides for an anti-profiteering section to make sure that businesses pass on the benefits of tax rate reduction under the GST regime.

Salient Facts

National Anti-Profiteering Authority (NAA) will be set up by the central government. The authority will have five members, including a Chairman. The authority will have powers to order a reduction in price commensurate with the lowering of incidence of taxation under GST.

The Anti-Profiteering Rules, 2017 has given details regarding the procedure for the selection of the members of the NAA and the procedure to be followed during investigations as well as the details regarding the powers given to the authority. The rules would operate for a period of two years. they were approved by GST Council at its meeting held on June 18. The government expects the rules to act as a deterrent against anti-profiteering.

NAA will have a three-tier structure: a Standing Committee on Anti-profiteering as well as State-level Screening Committees. The authority after receiving a complaint would send it to the State level Screening Committee after due examination. Based on the recommendations of the State-level committee, the Director General of Safeguards would investigate the complaint in a period of three months. If the authority finds merit in the complaint then it would be forwarded to NAA. The authority is required pass its order within three months. Before passing an order, an opportunity for hearing would be provided to the interested parties by the authority

The authority can make the erring company to refund the money to the consumer along with an interest of 18% or deposit it in the Consumer Welfare Fund. The authority can also cancel the registration of any entity if that entity fails to pass the benefits of lower taxes to the consumers.