NAA gets a one-year extension by GST Council

The GST Council in its 45th meeting held in Lucknow on 17th Sep under the Chairmanship of the Finance Minister Smt. Nirmala Sitharaman granted a one year extension to National Anti-Profiteering Authority (NAA) while an alternative will be explored in the Competition Commission of India (CCI).

The Council discussed how to deal with profiteering cases and if the National Anti-Profiteering Authority’s tenure would expire beyond November 30.

This is the National Anti-Profiteering Authority’s second extension.

Instead of giving CCI or any other institution the authority to deal with the profiteering case, the council extended NAA’s tenure for more than a year.

“An extension was granted due to the pending nature of the proceedings. In addition, the Council has directed the Tax Department to look into the potential of transferring pending and future cases to the CCI beyond November of this year.”

‘Different ministries’

The Corporate Affairs Ministry governs CCI. It was created as a result of the Competition Act of 2002. Its mission is to eradicate anticompetitive behaviours, promote and preserve competition, defend consumers’ interests, and secure trade freedom.

The NAA was constituted under Section 171 of the CGST Act and is part of the Finance Ministry. It went into effect on December 1, 2017 and hasn’t stopped since. It was designed as a transitional solution with a set time limit in light of the abrupt changes in tax levels following the implementation of GST, which was followed by periodic rationalisation.

The statute gives NAA the authority to decide whether or not a reduction in the rate of input tax credit (ITC) has been passed on to consumers through lower prices. If this is not the case, the Authority may request price reductions, impose penalties, and, in severe situations, order the termination of registration.

A chairman and four technical members make up the NAA. The chairmanship and two technical positions, on the other hand, are vacant. A quorum of the Chairman and three technical members is required by the authority.

‘No quorum’

During the current fiscal year’s April-June quarter, NAA’s activities was hampered. The epidemic first struck one of the technical members, as well as a few other officers.

After that, one technical member returned to his cadre, and the Chairman was transferred to a new assignment in May. One technical member is now in charge of the Chairman in addition to their regular duties. NAA was unable to resolve any cases in the April-June quarter due to a lack of quorum.

The National Anti-Profiteering Authority (NAA) is currently investigating 39 cases, while the Directorate General of Anti-Profiteering (DGAP), the Standing Committee, and State Level Screening Committees are investigating over 400 cases.

However, practically all of the Anti-Profiteering rules enacted by statute have been contested in eight High Courts by 126 writ petitions filed by suppliers against NAA orders.

The Finance Ministry is expected to designate a Chairman and three technical members soon, allowing the pending cases to be heard as quickly as possible.