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National Anti-Profiteering Authority to Ensure that Benefits of Reduction in GST Rates Passed on to Consumers

National Anti-Profiteering Authority (NAA), the institutional mechanism under the GST law to check the unfair profit-making activities by the trading community, and  mandated to ensure that the benefits of input credit and the reduction in GST rates on specified goods or services are passed on to the consumers by way of a commensurate reduction in prices, has been set up as approved by the Union Cabinet chaired by the Prime Minister on 16 November 2017 and Shri Badri Narain Sharma, a 1985 batch IAS officer of Rajasthan cadre, at present Additional Secretary in the Department of Revenue has been appointed on 28 November 2017 as its first Chairman in the rank of Secretary to Government of India. Shri B. N. Sharma has been closely associated with the formulation of GST and its implementation and is expected to give a direction to the Authority in boosting the confidence of consumers that GST is a ”Good and Simple Tax” in the overall national interest.

The Chairman would be assisted by four Technical Members from the Centre and/or the States of the rank of Joint Secretary and above and the appointed officials are Shri J.C. Chauhan, Chairman Tax Tribunal, Himachal Pradesh; Shri Bijay Kumar, Principal Commissioner GST, Kolkata; Shri C.L. Mahar, Principal Commissioner GST, Meerut; and Ms. R. Bhagyadevi, ADG, Systems, Chennai.

In addition to the NAA, the institutional mechanism for effective implementation of the anti-profiteering measures enshrined in the GST rules consists of a Standing Committee, State level Screening Committees and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).

NAA has been formed in the background of rate reduction of large number of items by the GST Council in its 23rd meeting at Guwahati. The GST Council has been engaged in rationalizing and reducing the GST rates on a wide spectrum of goods and services. The last and indeed the most significant reduction took place from midnight of 14 November, 2017 when the GST rates were slashed from 28% to 18% on goods falling under 178 headings. This now leaves only 50 items which attract the highest GST rate of 28%. Likewise, a large number of items witnessed a reduction in GST rates from 18% to 12% and so on with some goods being completely exempt from GST.

Consumers who are aggrieved that there has been no commensurate reduction in prices may apply for relief to the Screening Committee in the State. After forming a prima facie view on the substance of the application, the matter would be referred to a Standing Committee at the Centre. The Standing Committee shall, in turn, ask the Director General of Safeguards, CBEC to carry out detailed investigation. The Director General of Safeguards shall report its findings to NAA. The Screening Committee is expected to look into complaints of local nature while the Standing Committee would ordinarily enquire into cases of mass impact with All India ramification.

Once the NAA confirms there is justification to apply anti-profiteering measures, it has the authority to order the business concerned to reduce its prices or return the undue benefit availed along with interest @18% to the consumers of the goods or services. If the undue benefit cannot be passed on to the consumers, it can be ordered to be deposited in the Consumer Welfare Fund.

NAA also has the power to impose penalty on the defaulting business or even order the cancellation of its registration under GST.

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