ANTI PROFITEERING PROVISIONS AND AUTHORITY IN GST (PART-1)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 28-9-2017
The GST law contains a unique provision on anti-profiteering measure as a deterrent for trade and industry to enjoy unjust enrichment in terms of profit arising out of implementation of Goods and Services Tax in India, i.e., anti-profiteering measure would obligate the businesses to pass on the cost benefit arising out of GST implementation to their customers.
The provisions are contained in the GST law as per following provisions:
CGST Act, 2017
Section 171 on Anti-profiteering measures
IGST Act, 2017
Section 20 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to IGST Act
UTGST Act, 2017
Section 21 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to UTGST Act
SGST Act, 2017
Section 171 on Anti-profiteering measures
The Rules for Anti Profiteering are contained in Chapter
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s or both to the consumers.
The authority constituted by Central Government will have powers to impose a penalty in case it finds that the price being charged has not been reduced consequent to reduction in rate of tax or allowance of input tax credit.
During the two years of initial transition into GST regime, Anti-Profiteering Authority (APA) will step in and may ask businesses that have not passed on full benefits of reduced tax burden to consumers to make up for such benefit, with interest.
Functions of Anti-Profiteering Authority (APA)
The Authority under section 171 of the GST law shall have the following monitoring functions :
* Input tax credit availed by taxpayer have actually resulted in commensurate reduction in price of goods / services
* The reduction in prices on account of reduction in tax rates have actually resulted in a commensurate reduction in price of goods / services.
Authority for Checking Anti-Profiteering Activities
The Government has notified anti-p
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f Anti-Profiteering Authority (APA)
* To be set up under Anti-Profiteering Rules, 2017
* Does not cover State of J&K
* Investigation by Director General of Safeguards
* To determine methodology & procedure
* Cooperation with other agencies (income tax, police, revenue intelligence etc)
* Power to summon
* Order monitoring by IGST / SGST / CGST authority
* Tenure of 2 years.
Duties of APA
As per Rule 127, APA shall be duty bound to :
* to determine whether any reduction in rate of tax on any supply of goods or services or the benefit of the input tax credit has been passed on to the recipient by way of commensurate reduction in prices.
* to identify the registered person who has not passed on the benefit of reduction in 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.
* to pass an appropriate order.
The powers to take action are also listed as duties whereby it can order pr
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