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Cabinet approves formation of National Anti-profiteering Authority under GST

Cabinet approves formation of National Anti-profiteering Authority under GST

Days after announcing GST rate cut for 231 items, the union cabinet approved Thursday the establishment of the much-anticipated National Anti-profiteering Authority (NAA) to ensure the benefits of such rate cuts are passed on to consumers.

Section 171 of the CGST Act, which pertains to anti-profiteering, provides that any reduction in the rate of tax on supply of goods or services, or the benefit of input tax credit, shall be passed on to the recipient (consumer) by way of a commensurate reduction in prices.

"The Cabinet chaired by Prime Minister Narendra Modi has given its approval for the creation of the posts of chairman and technical members of the NAA under GST, following up immediately on Wednesday's sharp reduction in the GST rates of a large number of items of mass consumption".

"The National Anti-Profiteering Authority is an assurance to consumers of India".

The Council had earlier approved the setting up of a five-member National Anti-Profiteering Authority to enable consumers to file complaints in case the tax cuts are not passed on.

This follows the announcement on November 14 that the goods and services tax (GST) treatment of more than 200 goods and services would be altered, mainly to narrow the scope of the top, 28 percent rate. The authority will decide on the methodology to evaluate if the benefits of lower taxes under GST including those arising due to seamless input tax credit have not been passed to the consumer.

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Some experts believe that the GST rate cuts are not enough and that they come with a lot of impleenting challenges as to how to pass the benefit.

The institutional framework comprises NAA, a Standing Committee and Screening Committees in states and Directorate General of Safeguards in the Central Board of Excise and Customs, Noronha informed.

Subsequently, a five-member committee, headed by Cabinet secretary PK Sinha, revenue secretary Hasmukh Adhia, CBEC chairman Vanaja Sarna and chief secretaries from two states, has been tasked to select the chairman and the members of the authority.

"In the event the NAA confirms there is a necessity to apply anti-profiteering measures, it has the authority to order the supplier/business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services", it added.

According to a government release any affected consumer may complain to the authority and in case the incident of profiteering relates to an item of mass impact with "all-India" ramification, the application may be directly made to the standing committee. Only 50 items now attract tax rate of 28 per cent.

This newspaper had first reported last month that amid growing concerns over rising complaints of profiteering from all parts of the country after the implementation of GST, the Centre was planning to set up a national anti-profiteering authority. Under the NAA mechanism, a consumer who thinks he or she was not getting benefits of lower tax regime in GST can approach the Screening Committee in their respective State. Industry specialists, thus, seek detailed industrial guidelines by the GST Council.


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