GST Returns

Anti-Profiteering Authority (NAA) under GST

Anti Profiteering Authorities

In this article, we will discuss the Anti Profiteering Authorities appointed to make sure that these rules relating to anti-profiteering are properly adhered by the business houses, traders, and all the other concerned parties.

A three-tier authority structure has been constructed by the GST Council for the purpose of implementation of the said Anti-profiteering rules. This three-tier authority structure comprises of the following:

  1. National Anti-profiteering Authority
  2. Standing Committee
  3. Screening Committee

Except for these three level authorities, Directorate General of Safeguards (DGS) in Central Board of Excise & Customs (CBEC) also form part of this structure.

Constitution of Anti Profiteering Authorities

National Anti-profiteering Authority: The authority should consist of total 5 members, out of which;

  • One will be the Chairman, ( who holds or has held in the past the post of Secretary to the government of India and )
  • Four other Technical Members, ( Who are or have been Commissioners of State/ Central tax or any other equivalent position)

They should be appointed by the nomination of the Council.

Currently, Mr. Badri Narain Sharma holds the post of Chairman of the National Anti-profiteering Authority.

Standing Committee shall constitutes of the officers of Central as well as the State Government as recommended by the GST Council.

Screening Committee: It is a state level committee, constituted in every state. And shall comprise of two members;

  • One should be a State Government officer, nominated by the Commissioner;
  • One should be a Central Government officer, nominated by the Chief Commissioner.

Purpose of Composition of the Anti Profiteering Authorities

The main objective of forming the Authority is to implement the Anti-profiteering measure specified in Section 171 of the Central Goods and Service Act, 2017[1].

Firstly, to make sure that any reduction in the tax rate of any goods or services along with the benefits of input tax credit should be ultimately passed down to the final recipient of goods or services by way of reduced maximum retail prices.

Secondly, to identify the parties which are registered under Goods and service tax and have not passed down the benefit of reduced tax rates or input tax credit to the recipient of final goods or services.

The authority has the power to take actions against such registered taxpayers after it is identified by them or on any application or complaint received from any aggrieved party.

Flow of Investigation

Flow of Investigation

Power of the Authority

The authority after conducting the due investigation comes to the conclusion that the benefit of reduced tax rates and availed input tax credit is not passed down to the consumer of the goods or services, then it has the power to pass an order of the following effects:

  1. Reduction of Price
  2. Return to the recipient the amount equivalent to the benefit not passed down to him, along with an interest @18%.

The said interest is to be calculated from the date the benefit is not passed down and a higher amount was collected from the recipient.

If the final recipient is not identifiable then said amount along with the interest is required to be deposited in the Fund.

  1. Impose a penalty on the guilty party as specified under the Act, or
  2. In some extreme cases cancel the GST Registration of the party held accountable for not passing down the said benefit.

Above orders passed by the Authority, will be implemented by any of the following authorities on the direction of National Anti-profiteering Authority (NAA):-

  • Central Tax Authority
  • State/ Union Territory Authority.

Read our article:What is the Impact of the GST on Restaurant Services

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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