Anti-profiteering

Anti-profiteering

Today we are discussed about the most important topic that is the benefit of Gst will be transferred to the ultimate buyer.

National Anti-profiteering Authority is therefore being constituted by the central Government to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him, this is to ensure that the consumer is protected from arbitrary price increase in the name of GST. The implementation of GST law has brought benefits to both consumers and businesses 

Let us understand anti profiteering with an example. The tax rate on meals in restaurants has approximately reduced to 18% from the initial 20.5%. This means the food supplier should technically sell a Rs.100 worth food item for Rs.118 now and not Rs.120.5. As per the Anti Profiteering rules, this benefit of reduced tax rate should be passed on to the consumer in the form of reduced price. 

Constitution of the Authority:

The National Anti-Profiteering Authority shall be a five member committee consisting of a Chairman who holds or has held a post equivalent in rank to a Secretary to the Government of India; and four Technical Members who are or have been Commissioners of State tax or central tax or have held an equivalent post under existing laws.

Power to determine the methodology and procedure:

 The Authority can determine the methodology and procedure for determination as to whether the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices.

Duties of the Authority:

The Authority would have the following duties:

(i)                  to determine whether any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit has been passed on to the recipient by way of commensurate reduction in prices;

(ii)                 to identify the registered person who has not passed on the benefit of reduction in the rate of tax on supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices;

(iii)                to order,

(a)    reduction in prices;

(b)     imposition of penalty; and

(c)     Cancellation of registration.

(d)    Return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount not returned, as the case may be, in case the eligible person does not claim return of the amount or is not identifiable, and depositing the same in the Consumer Welfare Fund;