By TIOL News Service

NEW DELHI, NOV 16, 2017: THE Union Cabinet today gave approval for the creation of the posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under the GST. Such creation of new posts immediately followed the previous day's sharp reduction in GST rates, of a large number of items for mass consumption. The new posts paved the way for immediate establishment of this apex body, which would ensure that the benefits of the reduction in GST rates on goods or services or both , would be passed on to the ultimate consumers through reduction in prices.

The NAA would be headed by a senior officer of the rank of Secretary to the Government of India, and would be assissted by four Technical Members from the Centre and/or the States. The establishment of the NAA may be seen as a re-assurance to consumers, that the government was fully committed to take all possible steps to ensure that the benefits of lower prices of the goods and services reach them.

The "anti-profiteering" measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers. This institutional framework would now comprise the NAA, a Standing Committee, Screening Committees in every State and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).

Consumers have complained that the benefit of commensurate reduction in prices was not being passed, on purchase of goods or services, could apply for relief to the Screening Committee in the particular State. However, where any incident of profiteering occurs with an item of mass impact with 'All India' ramification, the application could be directly made to the Standing Committee. Upon forming a prima facie view that there was an element of profiteering, the Standing Committee is required to refer the matter for detailed investigation to the Director General of Safeguards, CBEC, which would report its findings to the NAA. In the event the NAA confirmed the necessity to apply anti-profiteering measures, it would have the authority to order the supplier/business concerned to reduce its prices or return the undue benefit availed by it, with interest, to the recipient of the goods or services. If the undue benefit could not be passed on to the recipient, it could be ordered to be deposited in the Consumer Welfare Fund. In extreme cases, the NAA could impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.

Thereby, the constitution of the NAA would bolster confidence of consumers availing benefits of the recent reduction in GST rates, and of GST in general.