Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – 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 XV (Rule Nos. 122 to 137) of the Central Goods and Services Tax Rules, 2017. O
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owers 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-profiteering authority (APA) which will check any undue increase in prices of products of companies und
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nvestigation 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 price reduction, refund of profit, recovery, penalty or even cancellation of GST registration. Duties of Various Authorities State Level Screening Committee Sc
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