Topic of the Day – National Anti-profiteering Authority

UPSC Exam Preparation: Topic of the Day – National Anti-profiteering Authority

The anti-profiteering clause under the Goods And Services Tax (GST)  Act mentions that any reduction in the rate of tax on any goods or services or the benefit of input tax credit must be passed on to the consumer  by the way of commensurate reduction in the prices of the respective goods or services. The Central government, for this purpose can set up a body to ensure that the anti-profiteering clause is being implemented in word and deed. Therefore, a National Anti-profiteering Authority (NAA) would be constituted as per the ‘anti-profiteering rules’. The intention is to ensure that all the stakeholders yield equal benefits of GST and to bolster consumer confidence.

The Anti-Profiteering rules, 2017 contains provisions for the selection of members of NAA, powers vested with the authority, the committees that would assist NAA in investigating complaints and the procedure to be followed in the investigations. Once the application to invoke Anti-profiteering measures is examined by the standing committee (State level standing committee for the businesses in one state only) and recommendation for consideration is received by NAA, it can:

  • Summon the representatives of the business against which the anti-profiteering clause has been invoked. It can also initiate investigation through the government wings like Directorate General of GST, Directorate of Data Analytics, Directorate general of Safeguards (CBEC)
  • Order the business to reduce the prices, so that the benefits accrue to the customers as well.
  • Return the undue benefit availed, along with 18% from the date on which a higher sum was collected.
  • Order the business to deposit the benefits in the Consumer Welfare Fund, when it is impossible to identify and return such benefits to the consumers.
  • Impose penalty on the profiteer or cancel its registration.

The NAA is empowered to take Suo Motu action apart from acting on the recommendations of standing committee. The authority is to be headed by a Secretary level officer and assisted by four technical members. Additional Directorate General of Safeguards shall hold the office of secretary to the authority. It has a three tier structure with a standing committee on Anti-profiteering, State level screening committee and the apex body being the NAA. The standing committee is empowered to refer those cases which require a detailed enquiry, to the Directorate General of Safeguards who gives his recommendations to the NAA, post investigation. The authority is entitled to give its verdict within 3 months from the date of receipt of report from the Directorate General of Safeguards. The authority takes up the cases of mass importance only.  The orders of the NAA can be appealed against, only in the high court.

Constitution of NAA is also to ensure that there is a check on inflation likely to be caused due to the implementation of GST as a replacement for all the indirect taxes, similar to that experienced by Singapore, Australia and Malaysia soon after the adoption of GST regime.

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