Anti-profiteering body can take suo motu action
The National Anti-Profiteering Authority that will be set up under the Goods and Services Tax (GST) regime will have wide ranging powers.
The rules that are yet to be notified by the government mandates a three-step procedure from detection of anti-profiteering to final decision by the authority on a case.
Three step procedure:
- Creating a Standing committee which would receive complains related to anti-profiteering practices
- The Standing committee will examine the accuracy and adequacy of the evidence to determine whether there is prima-facie evidence to support the claim of the applicant
- The committee after reviewing the prima facie evidence will refer the matter to Director-General of Safeguards (DGS) for a detailed inquiry
- Director-General of Safeguards should complete the investigation within three months
- The authority should take a decision within three months of receiving a report from DGS
- Clause 171 in the GST Act is known as Anti-Profiteering Clause
- According to this clause, it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices
Powers that the authority possess:
- It can order a reduction in prices, impose a penalty and cancel the registration of a company if it fails to pass the benefits of tax reduction to consumers
- It has the power to issue notice to anybody if it feels the case warrants an enquiry
- An appeal against the order passed by the authority can be filled in the concerned high court