The Union Cabinet has given a green signal to the creation of the National Anti-profiteering Authority in order to make certain that the businesses are passing on the benefits of GST to the end consumers. Though the entity is being established well over four months since the introduction of the new indirect tax regime, the main reason behind setting up such an authority is to ensure that the latest reductions in taxes are implemented with immediate effect by the businesses. Also, the authority has been empowered with a wide range of powers, including the ability to cancel reductions of the firms who fail to adhere to the set rules.
“The Union Cabinet has given its approval for the creation of the posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under GST, following up immediately on yesterday’s sharp reduction in the GST rates of a large number of items of mass consumption,” said the government in a release.
“This paves the way for the immediate establishment of this apex body, which is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.”
“From an industry perspective there are lot of implementing challenges and operational issues as to how to pass on the benefit,” Abhishek Jain, Tax Partner at EY, wrote in a statement. “Industry would accordingly expect that detailed guidelines providing guidance... are issued at the earliest by the GST Council,” he wrote.
“The ‘anti-profiteering’ measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers,” said the government in the announcement. “This institutional framework comprises the NAA, a Standing Committee, Screening Committees in every state and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).”