1. Introduction:- Goods and Service Act is in its way to be implemented recently and law maker are sure that with the implementation of GST, cost of production and prices will surely In order to ensure that the reduction in cost of production and price benefit is transferred to the ultimate consumer, specific provisions are made in the law by incorporating in Act and Rules.
2. Section 171 (1) of CGST Act, 2017:- Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
To ensure this provision sub section (2) is inserted.
171(2):- The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
With the power of this sub section anti profiteering Rules,2017 has been introduced which deals with the following:-
1. Constitution of the authority.
2. Constitution of the standing committee and screening committee.
3. Duties of the authority.
4. Power to determine the methodology and procedure.
5. Intimation and conduct of proceedings.
6. Power to summon.
7. Order of the authority.
8. Decision by authority.
Constitution of the authority:- The authority consist of:-
1. A chairman equivalent to the rank of secretary to the Government of India.
2. Four technical members who are or have been commissioner of state tax or central tax.
Chairman and member shall be nominated by the council.
Constitution of the standing committee:- Council will constitute standing committee which will consist members from central and state Government nominated by council.
Constitution of the screening committee:- In each state screening committee shall be constituted consisting of
1. One state Government officer nominated by the commissioner.
2. One central Government officer nominated by the chief commissioner.
Duties and Power of the Authority:-
1. Determining the methodology and procedure to determine whether the reduction in tax rate has been passed to the recipient by way of reduction in prices.
2. Determining whether the reduction in tax rate has been passed to the recipient by way of reduction in prices.
3. Identify the registered person who has not passed the benefit of the reduction in tax rate has been passed to the recipient by way of reduction in prices.
4. Make following order:-
5. Reduction in prices.
6. Return to the recipient to an amount equal to the benefit.
7. Impose penalty.
8. Cancellation of registration.
Examination of Application, Intimation and proceedings
Step No. 1
Application by Interested party/Commissioner/other person:-Application shall be filed by the interested party or commissioner or any other person with the evidence.
Application to screening committee:– if it involved local nature (state level calculations). Screening committee will forward the application to standing committee. Such application shall be filed by interested party only.
Application to standing committee:– Application to standing committee can be filed by interested person/commissioner or any other person.
Step No. 2
Examination of application by standing committee:- Standing committee within two months of receiving the application will examine the accuracy and adequacy of the evidence.
Step No. 3
Refer the matter to Director General of Safeguard:- After satisfying that there is prima facie evidence of contravention of section 171, standing committee will refer the matter to Director General of investigation.
Step No. 4
Notice to interested parties:- Director General of investigation will issue notice to the interested parties before investigation.
Step No. 5
Detailed Investigation:- Director General of investigation will collect the necessary evidence and conduct the detailed investigation.
Step No. 6
Complete the investigation and report to authority:- Director General of investigation will complete the investigation within three months of receipt of reference from standing committee. The period further can be extended for three months by standing committee.
Step No. 7
opportunity of being heard by the authority:- Opportunity of being heard shall be given by the authority to the interested parties.
Step No. 8
passing the order:- Authority can make the following orders:-
1. Reduction in prices.
2. Return to the recipient to an amount equal to the benefit.
4. Cancellation of registration.
In case of difference of opinion between the member of the authority, decision shall be taken by majority.