With the introduction of GST there will be easy credit flow mechanism, input tax benefits and reduced tax rates on supply of some goods or services. This is what the prima facie picture looks like but the intent of the government is to pass on the benefit of the same to the ultimate consumer. So if you are benefited by GST you have to pass on the benefit by reduction in prices. Anti-profiteering was a major concern for the industry from the beginning of GST as now the Anti-profiteering rules have been released by the government lets have further clarity on the same
Administrative structure under Anti-profiteering rule
Consists 1 Chairman & 4 Technical members
Constituted by council, have members as nominated by
Central government and state government
To be constituted for each state by state government
Consists 1 State government officer & 1 central government officer
Secretary to the authority:
Additional director general of safeguards
The authority has power to determine the whether the reduction in rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices.
The authority has further powers-
Application and proceedings for anti – profiteering
1) On receipt of Application by standing committee by
Along with the prima facie evidences that the benefit has not been passed by way of reduction in prices
However, if the application is from interested party (Receiver or supplier of goods or services) having the issues of local nature first shall be examined by state level committee, if it is satisfied then it shall be forwarded to standing committee
2) If the standing committee is satisfied that there is prima facie evidence that the supplier has not passed on the benefit, it shall refer the matter to Director General of safeguards.
3) The Director General of safeguards shall carry on the investigation and collect evidence whether the Benefit has been passed on to the recipient by way of reduction in price or not.
4) The Director General of safeguards shall give a report of its investigation findings to the authority within 3 months (further extension of not more than 3 months)
5) Authority on receipt of report from the Director General of safeguards shall determine whether the registered person has passed on the benefit of reduction in tax rates or the benefit of input tax credit to the recipient by way of reduction in price or not The interesting thing to note here is that the principle of natural justice has been modified, opportunity of being heard will only be given if you request the authority in writing
6) Authority can exercise any of the powers, it can order to reduce the prices, to refund to recipient, impose penalty or cancel registration.
Authority will be constituted for 2 years, unless council recommends otherwise
Some major areas of concerns of anti-profiteering rules are as follows-
If a registered person is clutched in any of the proceedings under anti profiteering then it can be a very intense blow to the business. So it is better to keep the records ready along with the implementation of GST that what all benefit has been achieved due to reduction in rate of taxes on goods or services or input tax benefit and the same has been passed on further.