GST’s Anti-profiteering authority may merge with the CCI for speedy disposal of cases

By the end of 2022, the government will likely merge the National Anti-profiteering Authority (NAA) with the Competition Commission of India (CCI). With this move, the government wants to continue the legacy of NAA and make sure to pass on the GST rate cut benefits promptly to all the eligible beneficiaries or consumers.

CNBC-TV18 claimed to have been told by anonymous official sources that the GST Anti-Profiteering Authority may probably get subsumed with the Competition Commission of India by November 2022. Sources have quoted that the competition watchdog may likely take over all remaining anti-profiteering cases of the NAA after the merger.

The NAA was established to facilitate the smooth passing of any GST rate reductions to consumers. The authority was set up as a statutory body under the Goods and Services Tax (GST) law to track and curb any unfair profiteering by GST registered sellers.

Until May 2022, there were approximately 400 pending cases with the National Anti-profiteering Authority. More specifically, the Ministry of Finance, the Central Government, had cautioned the authority to wrap up and give closure to as many cases as possible expeditiously.

It is pertinent that the GST Council first deliberated the suggestion to subsume the NAA with the CCI. The Council had urged the CCI to verify the feasibility of the proposal. Moreover, the merger could have happened once the GST council considered the suggestion and the recommendation passed at its meeting.

The initiative is expected to benefit consumers, businesses, and the Centre. It can reduce the litigation burden off the shoulders of the Central Government as the setup of NAA has been constitutionally questioned before many state High Courts.

The GST NAA had passed profiteering orders against corporate big shots such as Starbucks, Jubilant FoodWorks, HUL, McDonald’s, DLF, etc. Further, the authority came to the limelight in 2018 when it issued a verdict that the HUL had not passed on the GST rate cut benefits worth Rs.535 crore to its consumers. In return, the HUL challenged the NAA order.

The NAA was formed by the Central Government and tasked with the authority to verify if any registered recipient had claimed any additional input tax credits. Further, the authority had to check if any fall in the GST rates corresponded to the price reduction for the recipients.

Any consumer or an entity facing the nil price reduction for the products or services consumed even after the GST rate cut can raise a complaint with the NAA with sufficient prima facie evidence.

Further, any interested person or the Commissioner can file the complaint with proper supporting documents on behalf of any seller, retailer, trader or wholesaler along the supply chain who did not get the equivalent input tax credit or the tax reduction benefit.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@clear.in