On Tuesday, The Central Board of Excise and Customs (CBEC) has taken one further step and create anti- profiteering body in new GST Regime. As per the Anti- Profiteering Rules declared on Tuesday if any business firm fails to pass the benefits of lower tax rates to consumers must have to face penalties and cancellation of licence in new GST Regime.
The rules declared on Tuesday permit for a five-member National Anti-Profiteering Authority that would be empowered to reduce the prices due to the lower tax rates, either impose penalties or cancel the registration in Central GST Act, and efficiently stopping business firms for operating their business.
Anti- Profiteering Authority will be headed by a secretary-level officer in the government and an officer has powers which force businesses to file returns of any undue profit by not passing the benefit of lower tax rates to consumers along with 18% interest.
The authority is seen as a transitory body for two years unless the GST Council extends its tenure. Besides, as a safeguard, it will not be able to take any of these steps suo moto or on its own under the Anti-Profiteering Rules 2017.
The authority will itself decide the methodology and procedure for determining if tax benefits have been passed to consumers by way of reduction in prices. Under the anti- profiteering authority the government will appoint a national- level standing committee for solving all issues or complaints that have to be made in writing.
If a prima-facie case is made out, then same would be referred to the director general of safeguards for a proper investigation. The director general would submit its report to the authority within three months. Individually, each state will represent a screening committee for analysing the local issues. A two- month time period is decided for preliminary examination of complaint. After finding the solutions by the screening committees the solutions will be further sent to the standing committee.
The rules will be applicable across the India except for Jammu and Kashmir (J&K) and will be supervised by the Director General of Safeguards. Under the provision of Anti-Profiteering Authority, firms might loose their registration in a case if they do not pass the benefits of lower tax rates to consumers in new GST Regime
“The Authority shall, within a period of three months from the date of receipt of the report from the Director General of Safeguards determine whether a registered person has passed on the benefit of reduction in rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices,” the rules said. The Authority would take decisions on the basis of majority.
All firms are bounded by the rules or orders that passed by the authority and failure would result in action to recover the amount as per the GST Regime. The central government would be nominated the chairman and the members of the authority on the advice of a selection committee constituted by the GST Council. The chairman of Anti- Profiteering Authority would get Rs 2.25 lakh monthly salary along with other allowances and benefits as are admissible to a central government officer holding posts carrying the same pay.
The Technical Members of the Authority would get a monthly salary of Rs 2,05,400. Suresh Nandlal Rohira, a partner at Grant Thornton India said that the rules “look like a double-edged sword”.
