Competition panel to adjudicate cases of anti­profiteering

Competition panel to adjudicate cases of anti­profiteering

Subject: Polity

Section: National Body

Context: After over six months of handing over the erstwhile National Anti-profiteering Authority (NAA) mandate to the Competition Commission of India (CCI), the fair trade regulator is set to resume adjudication of anti-profiteering cases

Concept : 

• NAA is the anti-profiteering watchdog of GST. Its term ends in November, and no extension has been planned, per the report.
• NAA came into existence in 2017 and has received two extensions since then.
• NAA is a statutory body comes under the Finance Ministry and was established under Section 171 of CGST Act.
• It started working with effect from December 1, 2017.
• It was intended as a transitional arrangement with a specific time limit in view of the sudden changes in tax levels due to the introduction of GST, which was followed by periodic rationalisation.
• The law empowers NAA to determine whether reduction in rate of input tax credit (ITC) has been passed on to the consumers or not, by lowering prices. If not, then the Authority may ask for reduction of prices, levy penalty and in extreme cases can even order cancellation of registration.
• NAA consists of a chairman and four technical members. The authority needs a quorum of Chairman and three technical members.
• The orders of the NAA can be appealed against only in the high court.

Implementation:

• NAA’s investigation arm will continue to function in some form under CCI. The move will reduce the multiplicity of regulators as CCI can handle cases independently.
• The implementation of anti-profiteering provisions in GST law has faced several challenges.
• NAA’s role is to make sure that the benefit of tax rate reduction reaches the consumer
• This has been the role of NAA primarily because the GST council has been rejigging the rates in the last five years. NAA has little to do when rates go up.
• Authorities are still receiving several complaints about the early years of GST, saying that the benefit of the input tax credit has not been fully passed on to consumers.
• Sectors like eateries, cinemas, real estate, fast-moving consumer goods, etc., have faced NAA’s scrutiny the most.
• In many cases, the regulator ordered the business to return the allegedly overcharged amounts to the consumer.