Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit should be passed on to the recipient by way of commensurate reduction in prices. However, it has been the experience of many countries that when GST was introduced there has been a marked increase in inflation and the prices of the commodities. This happened in spite of the availability of the tax credit right from the production stage to the final consumption stage which should have actually reduced the final prices. This was happening because the suppliers were not passing on the commensurate benefits to the consumer and thereby indulging in illegal profiteering. National Anti-profiteering Authority (NAA) is therefore being constituted by the Central Government to examine whether additional input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in prices to the recipients.
Vision and Mission of NAA
The National Anti-profiteering Authority (NAA) is the statutory mechanism under GST law to check the unfair profiteering activities by the registered suppliers under GST law. The Authority’s core function is to ensure that the commensurate benefits of the reduction in GST rates on goods and services done by the GST Council and of the Input tax credit are passed on to the recipients by way of commensurate reduction in the prices by the suppliers.
The formation of NAA comes in the background of rate-reduction of large number of items by GST Council in its 22nd meeting at Guwahati. At the meeting, the Council reduced rates of more than 200 items including goods and services. This has made tremendous price reduction effect and the consumers will be benefited only if the registered suppliers under GST law are reducing the prices of respective items immediately.
The Authority’s main function is to ensure that the registered suppliers under GST law are not profiteering by charging higher prices from recipients in the name of GST. The legal mandate of NAA is to examine and check such profiteering activities and recommend punitive actions including cancellation of Registration. The chairman, NAA along with 4 Technical members and with help of the Standing Committee, Screening Committee in every State and the Directorate General of Anti-Profiteering in the Central Board of Indirect taxes & Customs (CBIC), will work together on the anti-profiteering front.
We hope to bring transparency in our decisions and be more proactive in persuading the industry and the registered suppliers under GST law in passing on benefits to the consumers.