National Anti-Profiteering Authority

From December 1, all complaints related to GST profiteering will be dealt with by India’s antitrust watchdog Competition Commission of India (CCI), in place of National Anti-Profiteering Authority.

Details –

• Currently, all consumer complaints of companies not passing on GST rate cut benefits are investigated by the Directorate General of Anti-profiteering (DGAP), which then submits its report to the NAA.
• The tenure of NAA ends this month and its functions will be taken over by the CCI from December 1.
• The central government, on the recommendations of the Goods and Services Tax Council, has transferred the functions of NAA to the CCI.
  • i.e., now CCI will 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.

About the ‘National Anti-Profiteering Authority’ –

• The NAA was set up in November 2017 as a statutory body under the GST law to check unfair profiteering activities by registered suppliers.
• Its core function is to ensure that benefits of reduction in GST rates on goods and services and of the input tax credit are passed on to consumers by way of reduction in prices
• It was set up for two years till 2019, but was later extended till November 2021.
• Working —
  • • As per the GST law, a 3-tier structure was set up for investigation and adjudication of the profiteering complaints.
    • The complaints are required to be first sent to state-level screening and standing committees, which are then forwarded to DGAP for investigation.
    • The investigation report is then submitted to NAA. The authority thereafter passes an order after hearing both the parties.
    • If NAA finds that a supplier has indulged in profiteering, it has to return the profiteered amount, along with 18 per cent interest, to the consumer.
    • If all the consumers cannot be identified, then the amount is transferred to the consumer welfare fund.

Why was it established?

• Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit should be passed on to the recipient by way of commensurate reduction in prices.
• However, it has been the experience of many countries that when GST was introduced there has been a marked increase in inflation and the prices of the commodities.
• This was happening because the suppliers were not passing on the commensurate benefits to the consumer and thereby indulging in illegal profiteering.
• Therefore, NAA was constituted by the Central Government to examine whether the reduction in the tax rate have actually resulted in a commensurate reduction in prices to the recipients.