All about anti profiteering authority under GST

All about anti profiteering authority under GST LATEST >>> Anti Profiteering Mechanism for benefit of consumers LATEST>>>

Ankita Khetan

Nov 22, 2017

Last update on Nov 22, 2017

All about anti profiteering authority under GST

LATEST >>> Anti Profiteering Mechanism for benefit of consumers

LATEST>>> Download the format issued by CBEC for filing Anti-Profiteering application

Introduction: Any reduction in rate of tax on any supply of goods or servicesor the benefit of input tax credit should have been passedon to the recipient by way of commensurate reduction inprices. However it has been the experience of many countriesthat when GST was introduced there has been a markedincrease in inflation and the prices of the commodities. Thishappened in spite of the availability of the tax credit rightfrom the production stage to the final consumption stagewhich should have actually reduced the final prices. This wasobviously happening because the supplier was not passing onthe benefit to the consumer and thereby indulging in illegalprofiteering. National Anti-profiteering Authority is thereforebeing constituted by the central Government to examinewhether input tax credits availed by any registered person orthe reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or servicesor both supplied by him, this is to ensure that the consumeris protected from arbitrary price increase in the name of GST. Constitution of the Authority: The National Anti-Profiteering Authority shall be a five membercommittee consisting of a Chairman who holdsor has held a post equivalent in rank to a Secretary to theGovernment of India; and four Technical Members who are orhave been Commissioners of State tax or central tax or haveheld an equivalent post under existing laws.The Additional Director General of Safeguards under the CBEC (Board) shall be the Secretary to the Authority.The Authority shall cease to exist after the expiry of two yearsfrom the date on which the Chairman enters upon his officeunless the Council recommends otherwise Power to determine the methodology and procedure: The Authority can determine the methodology andprocedure for determination as to whether the reductionin the rate of tax on the supply of goods or services orthe benefit of input tax credit has been passed on by theregistered person to the recipient by way of commensuratereduction in prices. Duties of the Authority: The Authority would have the following duties:

(i) to determine whether any reduction in the rate of tax onany supply of goods or services or the benefit of inputtax credit has been passed on to the recipient by way ofcommensurate reduction in prices; (ii) to identify the registered person who has not passed onthe benefit of reduction in the rate of tax on supply ofgoods or services or the benefit of input tax credit to therecipient by way of commensurate reduction in prices; (iii) to order,

(a) reduction in prices; (b) return to the recipient, an amount equivalent to theamount not passed on by way of commensuratereduction in prices along with interest at the rate ofeighteen per cent. from the date of collection of thehigher amount till the date of the return of such amountor recovery of the amount not returned, as the case maybe, in case the eligible person does not claim return of theamount or is not identifiable, and depositing the same inthe Consumer Welfare Fund; (c) imposition of penalty; and (d) cancellation of registration.

Application to the Authority: All applications from interested parties on issues oflocal nature shall first be examined by the State levelScreening Committee constituted in each State by theState Governments consisting of an officer of the StateGovernment, to be nominated by the Commissioner, and anofficer of the Central Government, to be nominated by theChief Commissioner. The Screening Committee on being satisfied that the supplierhas not passed on the reduction in rate of tax on any supplyof goods or services or the benefit of input tax credit on tothe recipient by way of commensurate reduction in prices,will forward the application with its recommendations to the Standing Committee on Anti-profiteering, which shall consist ofsuch officers of the State Government and Central Governmentas may be nominated by the GST council, for further action. If the Standing Committee is satisfied that there is a primafacieevidence to show that the supplier has not passed on thebenefit of reduction in the rate of tax on the supply of goods orservices or the benefit of input tax credit to the recipient by wayof commensurate reduction in prices, it shall refer the matter tothe Director General of Safeguards for a detailed investigation. Investigation: The Director General of Safeguards shall shall conductinvestigation and collect evidence necessary to determineundue profiteering and before initiation of the investigation,issue a notice to the interested parties (and to such otherpersons as deemed fit for a fair enquiry into the matter)containing, inter alia, information on the following, namely: -

(a) the description of the goods or services in respect of whichthe proceedings have been initiated; (b) summary of the statement of facts on which the allegationsare based; and (c) the time limit allowed to the interested parties andother persons who may have information related to theproceedings for furnishing their reply.

The evidence or information presented to the Director Generalof Safeguards by one interested party can be made available tothe other interested parties, participating in the proceedings.The evidence provided will be kept confidential and theprovisions of section 11 of the Right to Information Act, 2005(22 of 2005), shall apply mutatis mutandis to the disclosure ofany information which is provided on a confidential basis. The Director General of Safeguards can seek opinion of any otheragency or statutory authorities in the discharge of his duties.The Director General of Safeguards, or an officer authorised byhim will have the power to summon any person necessary eitherto give evidence or to produce a document or any other thing.He will also have same powers as that of a civil court and everysuch inquiry will be deemed to be a judicial proceeding. The Director General of Safeguards will complete theinvestigation within a period of three months or within suchextended period not exceeding a further period of three monthsfor reasons to be recorded in writing as allowed by the StandingCommittee and, upon completion of the investigation, furnish to the Authority, a report of its findings along with the relevantrecords. Order of the Authority: The Authority shall (after granting an opportunity of hearing tothe interested parties if so requested) within a period of threemonths from the date of the receipt of the report from theDirector General of Safeguards determine whether a registeredperson has passed on the benefit of the reduction in the rate oftax on the supply of goods or services or the benefit of inputtax credit to the recipient by way of commensurate reductionin prices. If the Members of the Authority differ in opinion on any point,the point shall be decided according to the opinion of themajority. Where the Authority determines that a registered person hasnot passed on the benefit of the reduction in the rate of tax onthe supply of goods or services or the benefit of input tax creditto the recipient by way of commensurate reduction in prices,the Authority may order-

(a) reduction in prices; (b) return to the recipient, an amount equivalent to the amountnot passed on by way of commensurate reduction in pricesalong with interest;

Any order passed by the Authority shall be immediatelycomplied with by the registered person failing which actionshall be initiated to recover the amount in accordance withthe provisions of the Integrated Goods and Services TaxAct or the Central Goods and Services Tax Act or the Union territory Goods and Services Tax Act or the State Goods andServices Tax Act of the respective States, as the case maybe. The Authority can direct any authority of central tax, Statetax or Union territory tax to monitor the implementation ofthe order passed by it. Conclusion: National Anti-Profiteering Authority is a mechanism devisedto ensure that prices remain under check and to ensure thatbusinesses do not pocket all the gains from GST becauseprofit is fine, but undue profiteering at the expense of thecommon man is not.

CHAPTER XV

ANTI-PROFITEERING

Chapter XV of CGST Rules, 2017 consists of sixteen rules relating to ANTI-PROFITEERING under the GST regime. All this rules are available for your ready reference. Rule 122 :Constitution of the Authority Rule 123 :Constitution of the Standing Committee and Screening Committees Rule 124 :Appointment, salary, allowances and other terms and conditions of service ofthe Chairman and Members of the Authority Rule 125 :Secretary to the Authority Rule 126 : Power to determine the methodology and procedure Rule 127 : Duties of the Authority Rule 128 : Examination of application by the Standing Committee and ScreeningCommittee Rule 129 : Initiation and conduct of proceedings Rule 130 : Confidentiality of information Rule 131 : Cooperation with other agencies or statutory authorities Rule 132 : Power to summon persons to give evidence and produce documents Rule 133 : Order of the Authority Rule 134 : Decision to be taken by the majority Rule 135 : Compliance by the registered person Rule 136 : Monitoring of the order Rule 137 : Tenure of Authority Click Here to Buy CA Final Pendrive Classes at Discounted Rate