GST Anti-Profiteering Body with CCI Merging Face New Challenges

A lot of challenges have been faced by the idea of the government i.e merging the National Anti-profiteering Authority (NAA), which penalizes businesses for goods and services tax (GST)-affiliated profiteering, with the anti-trust regulator Competition Commission of India (CCI) along with the short span of nearly about a month left prior to the lapse of NAA’s term.

The challenges comprise lower funding and infrastructure required for CCI to consider other mandates, distinctions in the design of the investigating arms of the two regulators along with the existing cap of three members in CCI with the chairman, mentioned that the person told about the discussions on the case in the government.

No mood of the extension of NAA is there of the government, it sets up for 2 years in 2017 and then gets extended twice till the finish of Nov 2022, the other arrangement of the merger with CCI would suffer from administrative problems.

On profiteering, there would be complaints which do not have been measured yet while there is a chance of getting new complaints, which makes it tough for the government to draw the GST-related profiteering to a closure.

Even, in fact, NAA was set up as a temporary action to contain profiteering via businesses during the time of transition to the latest indirect tax system in the year 2017.

Moreover, there would be the petitions that oppose the anti-profiteering regime’s constitutional validity that would be now sub judice. Since real estate projects secure longer gestation durations, some projects which have initiated before 2017 are yet to get finished rendered so there can be more profiteering complaints on the real estate developers in the subsequent times specified by the 2nd individual who does not open to discussions in the government.

The government has seen the plan as recommended by the federal body, the GST officials would be to merge the investigating wings of CCI and NAA, transfer due profiteering cases to CCI for adjudication and repatriate administrators in the NAA to their parent cadres.

The investigation wings of the NAA and CCI contain distinctions. The Directorate General of Anti-Profiteering (DGAP), the investigation wing of the NAA, is required to be an expert in indirect taxes, while the Directorate General probing anti-competitive behaviour can be from a much broader set of disciplines. The DG and CCI need not be from the discipline of competition law.

The same diversity asks for a revision in the rule for the execution of the CCI-NAA merger plan. Indeed the decision of the cabinet required to choose for the expansion of the top brass of CCI that currently is just for three members and a chairperson,

Since recruitments in regulatory bodies take a long time, a smooth transition of the anti-profiteering ecosystem would require urgent appointments.

The major challenge seen by businesses in following the anti-profiteering regime would be the lack of mentioned rules and the standard steps to compute the commensurate price reduction warranted by a tax cut or availability of tax credits.

The regulator develops a negative impression of the business value in the minds of the customer.

The council considers that calculating the extent of profiteering the advantage of tax rate reduction or GST input tax credit availability would not be passed to customers and is a harder chore, particularly for the tax credits.