Anti-profiteering authority under GST gets cabinet nod

NEW DELHI: The Union cabinet on Thursday approved setting up of a

National Anti-profiteering Authority

(

NAA

) under GST to ensure that consumers get the benefit of reduced prices under the new tax regime.

Law minister Ravi Shankar Prasad said there were only 50 items now which attracted the highest tax of 28% under GST and rates on many items had been cut to 5%.

“The National Anti-profiteering Authority is an assurance to consumers of India. If any consumer feels that the benefit of tax rate cut is not being passed on, then he can complain to the authority,” Prasad told reporters after the cabinet meeting. “This reflects the government’s full commitment to take all possible steps to ensure benefits of implementation of GST to the common man,” he added.

The cabinet approval paves way for immediate setting up of the entity. GST Council, chaired by finance minister Arun Jaitley and comprising state FMs, had last week decided to slash tax rates of over 200 items in the GST regime as well as lowered tax rates on AC and non-AC restaurants to 5%.

The council had earlier approved setting up of the five-member panel to enable consumers to file complaints in case price reduction was not passed on by businesses.

A five-member committee, headed by cabinet secretary

P K Sinha

and comprising finance secretary

Hasmukh Adhia

, CBEC chairman Vanaja Sarna and chief secretaries from two states, has been asked to finalise the chairman and members of the authority.

The NAA will have a sunset date of two years from the date on which the chairman assumes charge. The chairman and the four members of the authority should be less than 62 years.

As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature will be first sent to the state-level ‘screening committee’, while those of national level will be marked for the ‘standing committee’.

If the complaints have merit, the respective committees will refer the cases for further investigation to the Directorate General of Safeguards (DGS).

The DGS will generally take about three months to complete the investigation and send the report to the anti-profiteering authority. If the authority finds that a company has not passed on GST benefits, it will either direct the entity to pass on the benefits to consumers or, if the beneficiary cannot be identified, ask the company to transfer the amount to the ‘consumer welfare fund’ within a specified time.

The authority will have the power to cancel registration of any entity or business if it fails to pass on to consumers benefit of lower taxes, but it would probably be the last step against any violator.

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