TMI BlogAnti-profiteering provisionsX X X X Extracts X X X X X X X X Extracts X X X X ..... ssons for transition to GST released by the Comptroller Auditor General (C AG) of India in June, 2010 mentioned about several cases of profiteering by dealers by not passing on the benefit of tax rate reduction to the consumers in the wake of implementation of VAT in the country. The above C AG report, after checking the records of 13 manufacturers in a State in three initial months of implementation of VAT, found that the manufacturers did not reduce the MRP of the goods despite sharp fall in the tax rate post-VAT implementation. As a learning from the VAT experience, legal teeth was sought to be provided in GST law by incorporating anti-profiteering provisions to check profiteering by businesses when GST was being rolled out in the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he NAA has the power to identify the registered person who has not passed on the benefit of reduction in tax rate or input tax credit by way of commensurate reduction in prices and it may order reduction in prices; return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest; cancellation of registration of the supplier and imposition of penalty. In case the eligible recipient is not identifiable or does not claim return of the amount, the NAA may order the supplier to deposit the amount in the Consumer Welfare Fund. Q 7. Should a customer pay extra GST on Maximum Retail Price (MRP) affixed on goods? Ans. No. MRP is inclusive of GST and is the maximum retail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti-profiteering Authority Dept. of Revenue, Ministry of Finance 6th Floor, Tower One Jeevan Bharati Building Connaught Place New Delhi-110 001. Directorate General of Anti-Profiteering Standing Committee Directorate General of Anti-profiteering, Dept. of Revenue, Ministry of Finance, 2 nd Floor, Bhai Vir Singh Sahitya Sadan, Bhai Vir Singh Marg, Gole Market, New Delhi -110001. Q 9. In cases of profiteering in the name of GST, what is the complaint redressal mechanism available to the consumer? Ans. The CGST Act, SGST Acts the CGST/ SGST Rules framed thereunder provide for the following complaint redressal mechanism. 1. The aggrieved persons may file an application, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application for each Good/Service is required to be filed. Q 12. What is the methodology to identify cases of profiteering? Ans. Rule 126 of the CGST Rules, 2017 vests the power to determine the methodology procedure with the National Anti-Profiteering Authority constituted by the Central Government under Section 171 (2) of the CGST Act, 2017 . The guiding principle mentioned in the said Rule states that the reduction in tax rate on supply of goods or services or benefit of input tax credit has to be passed on to the recipient by way of commensurate reduction in prices. The methodology and procedure adopted to identify cases of profiteering may vary from case to case, depending upon the facts of the case and the nature of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the apparently lower tax rates in the earlier indirect tax regime. In pre-GST era, Central Excise duty was payable on most construction material at 12.5%. In addition, VAT was payable on construction material at 12.5% to 14.5% in most of the States the construction material also suffered entry tax. The input tax credit of the above taxes was inadmissible for meeting Service Tax liability of the builder, thus leading to cascading of input taxes on constructed flats a higher effective tax incidence. But GST regime allows full input tax credit for offsetting the headline rate of 12%, thereby reducing the effective tax incidence. Q 16. Can action be taken under the anti-profiteering provisions in case benefit of transitional cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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