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GST council has notified constitution of Anti-profiteering Authority - (20 Jun 2017)

Indirect Taxation

In order to keep a check on passing of price reduction benefit in tax rate from businesses to consumers, a five-member anti-profiteering authority has been constituted by GST Council headed by Union Finance Minister. Anti-profiteering Authority shall consist of a Chairman who holds or has held a post equivalent in rank to a Secretary to 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 the existing law, -to be nominated by the Council. Further, Authority can also take Suo Motu action, besides acting on complaints.

Committee may require any authority of central tax, State tax or Union territory tax to monitor implementation of order passed by it. Central Board of Excise And Customs has notified Anti-profiteering Rules, 2017 in exercise of the powers conferred by Section 164 read with Section 171 of the Central Goods and Services Tax Act, 2017(12 of 2017). Section 171 of Central GST Act provides that, any reduction in rate of tax on any supply of goods or services or benefit of input tax credit will be passed on to recipient by way of commensurate reduction in prices.

Anti-profiteering Rules mandates Authority to determine whether any reduction in rate of tax on any supply of goods or services or benefit of input tax credit has been passed on to recipient by way of commensurate reduction in prices. Further, Authority is empowered to order a reduction in prices, impose a penalty, and even cancel registration of a Company deemed to have not passed on a tax rate reduction to consumers.

In first phase, all applications shall be examined by State level Screening Committee and Screening Committee shall, who on being satisfied that, supplier has contravened provisions of Section 171, forward application with its recommendations to Standing Committee for further action. On satisfaction of Committee that, there is a prima-facie evidence to show that, supplier has not passed on benefit of reduction in rate of tax on supply of goods or services or benefit of input tax credit to recipient by way of commensurate reduction in prices, it shall refer matter to Director General of Safeguards for a detailed investigation. Thereafter, Director General of Safeguards shall conduct investigation and is required to complete the same within three months. Report is to be submitted to anti-profiteering authority which will take a decision on penalty. Authority will commence work after July 1 GST roll out. Authority shall cease to exist after expiry of two years from date on which Chairman enters upon his office unless Council recommends otherwise.


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