Introduction - Anti-profiteering in GST law - GST Ready Reckoner - GST

Introduction - Anti-profiteering in GST law Background of anti-profiteering in GST law The Study Report titled Implementation of Value Added Tax (VAT) in India-Lessons 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 country. Meaning of Profiteering In terms of Section 171 of the CGST Act, 2017, the suppliers of goods and services should pass on the benefit of any reduction in the rate of tax or the benefit of input tax credit to the recipients by way of commensurate reduction in prices. The wilful action of not passing on the above benefits to the recipients in the manner prescribed is known as profiteering . Anti-profiteering mechanism under GST Act CGST Act, 2017 mandates a 3-tier structure for the investigation and adjudication of the complaints regarding profiteering. 1. National Anti-profiteering Authority (NAA) 2. Directorate General of Anti-Profiteering (DGAP) 3. State-level Screening Committees and Standing Committee. Screening Committees and Standing Committee GST Council has constituted a Standing Committee, having members from both State and Central governments. Every State shall have one State-level Screening Committee. It will have one member from State government and one-member from Central government as nominated by the respective appropriate authority. State screening committee shall forward an application of a local nature, relating to profiteering to the Standing Committee if it is prima facie satisfied that Section 171 of the CGST Act has been contravened. [ Rule 128 (2) of CGST Rules, 2017 ] If the Standing Committee is satisfied that supplier has contravened the Section 171 of CGST Act and there is a prima facie evidence in support of the allegation, the case shall be transferred to DG Anti-Profiteering for further investigation. [ Rule 129 (1) of CGST Rules, 2017 ] The Committees shall complete the investigation within a period of two months from the date of the receipt of a written application or within such extended period not exceeding a further period of one month for reasons to be recorded in writing as may be allowed by the Authority. Role of DG Anti-Profiteering DG Anti-Profiteering is the investigating-arm in the anti-profiteering mechanism. It can summon the interested parties or make inquiry or call for the relevant documents for the investigation. It can take help from technical expert in the due course of investigation. [ Rule 132 of CGST Rules, 2017 ] DG Anti-Profiteering shall complete the investigation within a period of six months of the receipt of the reference from the Standing Committee or within such extended period not exceeding a further period of three months for reasons to be recorded in writing as may be allowed by the Authority. [ Rules 129 (6) of CGST Rules, 2017 ]. Where can a consumer register his complaint for redressal Charging more than MRP attracts the provisions of Legal Metrology Act. In case of over-charging over MRP, a complaint can be lodged on toll-free number 1800-114000/14404. There are multiple ways through which aggrieved consumers or suppliers of goods and services can register their complaints against profiteering: a. Online complaint facility: Complainant can register an online complaint at http://www.naa.gov.in/complaint.php Link to see the guidelines to register online complaint: http://www.naa.gov.in/page.php?id=guidelines-forconsumers b. User can mail the complaint at Via Mail: Standing Committee , at this level complaints involving issues of all-India nature. Mail Id - [email protected] [email protected] State-Screening Committees, at this level complaints involving issues of local nature Mail Id - For State-wise E-mail Addresses please refer to: http://www.naa.gov.in/docs/screening%20committees%2020-08-18.xlsx c. By Post: National Anti-profiteering Authority Postal Address National Anti-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 Postal Address 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. Complaint redressal mechanism under Anti-profiteering The CGST Act, SGST Acts the CGST/ SGST Rules framed thereunder provide for the following complaint redressal mechanism. The aggrieved persons may file an application in Form APAF-01, before the Standing Committee on Anti-profiteering or before the State Level Screening Committee. (If the issue involved is of local nature). The State Level Screening Committee constituted in every State/UT with legislature examines it forwards it to the Standing Committee constituted at the national level, if a prima facie case of profiteering is made out against the registered person. Thereafter, the Standing Committee shall refer the matter to the Director General of Anti-Profiteering (erstwhile DG, Safeguards) for a detailed investigation, if prima facie evidence of profiteering exists. The DG, Anti-Profiteering shall conduct the investigation and submit its report to the National Anti-Profiteering Authority (NAA) constituted by the Central Government under section 171 (2) of the CGST Act, 2017 for taking appropriate action. Time limit to resolved consumer complaint The maximum time envisaged for resolution of cases is 9 months excluding the time taken by the State-level screening committee and the Standing Committee (maximum 2 months) for processing the complaints. How can I know the status of my complaint of profiteering against a supplier Online Process The complainant can track the online-complaint through http://www.naa.gov.in/track-complaint.php Offline Process Complainant can also contact at Postal Address:- Directorate General of Anti-profiteering, Dept. of Revenue, Ministry of Finance, 2nd floor, Bhai Veer Singh Sahitya Sadan, Bhai Veer Singh Marg, Gole market, New Delhi -110 001. Contact no.: 011- 2374 1544, 011- 2374 1542, Email-id: [email protected]