Cabinet approves National Anti-profiteering Authority under GST

The Union Cabinet on Thursday approved the setting up of a National Anti-profiteering Authority (NAA) under the GST, which will ensure that benefits of reduction in tax rates are passed on to consumers through reduced prices.

The body will have screening committees in all states which consumers can approach if they find they are not getting the benefit of input tax credits and rate cuts, Business Standard reported.

The decision comes in the wake of reports that restaurants are not passing on the benefits of reduced GST rates to consumers, and a day after GST rate cut on more than 200 items came into force.

The government reportedly said the Cabinet was “following up immediately on yesterday’s (November 15) sharp reduction in GST rates on a large number of items of mass consumption”.

“The NAA is aimed at reassuring consumers that the government is fully committed to take all possible steps to ensure that the benefits of implementation of GST in terms of lower prices of goods and services reach them,” a government statement read. “This institutional framework comprises the NAA, a standing committee, screening committees in every state and the directorate general of safeguards in the Central Board of Excise and Customs,” it added.

A senior secretary-level official of the central government will head the NAA, and there will be four technical members from either the Centre or the states.

The five-member anti-profiteering authority will have the power to ask those not passing on the tax benefit to return the undue profit earned to consumers along with an 18 per cent interest, reduce prices and if the consumer is not identifiable, deposit the amount in a consumer welfare fund, Economic Times reported.

“It is now expected that the government will soon notify the methodology to be used to determine whether profiteering has occurred,” MS Mani, senior director, indirect tax, Deloitte, was quoted as saying in the Business Standard report.