GST Law ; SUO MOTU Action For Anti-Profiteering

Can punish firms not passing GST gains

The National Anti-Profiteering Authority, to be set up under the Goods and Services Tax (GST) regime, will have wide-ranging powers, including the power to issue notices to anybody that it feels warrants a “fair enquiry,” as per the rules finalised by the GST Council on Sunday.

The powers of the Authority include the ability to order a reduction in prices, impose a penalty, and even cancel the registration of a company deemed to have not passed on a tax rate reduction to consumers.

The rules, which are yet to be gazetted or made public, state that the Authority is to be chaired by either a retired High Court judge or a member of the Indian Legal Service who has at least three years of experience at the level of Additional Secretary or higher.

The rules mandate a three-step procedure, from the detection of anti-profiteering to the decision of the Authority.

They provide for the creation of a Standing Committee, which would receive written complaints from anyone about anti-profiteering practices.

“The Standing Committee shall, on receipt of a written application… from an interested party or from a Commissioner or any other person, examine the accuracy and adequacy of the evidence provided in the application to determine whether there is prima-facie evidence to support the claim of the applicant,” say the Anti-Profiteering Rules, a copy of which has been reviewed by The Hindu.

The Standing Committee, after reviewing the prima facie evidence, will refer the matter to the Director-General of Safeguards (DGS) for a detailed inquiry. The DGS must complete its investigation within three months of receiving the reference from the Standing Committee, or furnish in writing reasons for a delay, which itself cannot exceed three months more. The Authority will have three months to issue its verdict following the inquiry by DGS, which means the entire procedure, from investigation to verdict, cannot exceed nine months.

“The Authority shall, within a period of three months from the date of receipt of the report from the DGS, determine whether a registered person has passed on the 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 a commensurate reduction in price,” the rules say.

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