The Indian government has proposed an amendment to the Central Goods and Services Tax ( CGST ) Act, in the Union Budget 2024-25, empowering the GST Appellate Tribunal (GSTAT) to handle anti-profiteering cases.
This marks the latest development in the evolving framework for addressing unfair profiteering activities by registered suppliers under the GST law. Below is a timeline of the various authorities that have been entrusted with this responsibility over the years.
Anti-Profiteering under Goods and Services Tax Laws
Simply put, any reduction in GST rate or benefit from input tax credits should be passed on to consumers through lower prices. For example, if a business saves ten rupees on an item, the item should be ten rupees cheaper for the consumer.
Consider GST on food items in India, which ranges from 5% to 18% depending on factors like the type of establishment and ingredients. For instance, chocolate and cocoa-based foods are taxed at 18%. If a chocolate bar costs Rs. 118, this includes 18% GST, breaking down to Rs. 100 + Rs. 18 GST. If the GST rate drops to 5%, the price should decrease to Rs. 105. If the business keeps selling it at Rs. 118, they are “profiteering,” which means making unfair profits illegally.
Read More Here: GST Anti-Profiteering Clause: Intentions and Impacts
Establishment of the National Anti-Profiteering Authority (NAA)
28th November 2017: The Press Information Bureau (PIB) announced the government’s immediate action following the Cabinet’s approval to create the posts of Chairman and Technical Members of the National Anti-Profiteering Authority (NAA). Senior IAS officer Shri B.N. Sharma was appointed as the first Chairman, assuming office on 1st December 2017.
Rule 137: Tenure of the Authority
– Initially, the tenure of the NAA was set for two years from the date the Chairman assumed office.
18th July 2019: The tenure was extended to four years.
1st December 2021: The tenure was further extended to five years.
Transfer to the Competition Commission of India (CCI)
17th September 2021: During the 45th GST Council meeting, the Council explored the possibility of transferring all anti-profiteering cases to the Competition Commission of India (CCI). The tenure of the NAA was extended by one year, up to 30th November 2022, during which the arrangement with the CCI was to be finalised.
23rd November 2022: The government officially empowered the CCI to examine whether input tax credits availed by registered persons or reductions in tax rates resulted in corresponding price reductions of goods or services. This notification came into effect on 1st December 2022.
Empowering the GST Appellate Tribunal (GSTAT)
6th May 2024: A PIB release detailed the appointment of Justice (Retd.) Sanjaya Kumar Mishra as the President of the GST Appellate Tribunal (GSTAT). This marked the beginning of the operationalization of GSTAT, which is tasked with resolving GST-related disputes efficiently. The government has notified the establishment of a Principal Bench in New Delhi and 31 State Benches across the country. The process of appointing Judicial and Technical Members is currently underway.
GST Council Meeting: 53rd GST Council Meeting recommends sunset clause for receipt of any new application for Anti-profiteering
Budget 2024-25 Update
23-07-2024: In a significant move, the government proposed amendments to the Section 171 of the Central Goods and Services Tax Act to enable the GST Appellate Tribunal to handle anti-profiteering cases. This amendment also proposed a sunset clause, allowing the government to notify a date after which the Authority for Anti-Profiteering would cease accepting new applications for examination.
Future Prospects
As the GST Appellate Tribunal takes on the additional responsibility of handling anti-profiteering cases, its effectiveness in this new role remains to be seen. The transition of responsibilities from NAA to CCI, and now to GSTAT, reflects the government’s efforts to streamline and enhance the efficiency of dispute resolution mechanisms within the GST framework. The long-term impact of these changes will be closely monitored by stakeholders and experts alike.
It is likely that the sunset clause will bring an end to the anti profiteering provisions itself.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
