Delhi HC upholds anti­ profiteering clause of GST laws

Delhi HC upholds anti­ profiteering clause of GST laws

Subject: Polity

Section: National Body 

Context:

• In a setback for some 50 companies such as Hindustan Unilever and Nestle the Delhi High Court on Monday upheld the anti­profiteering provisions of the GST laws.

More About News:

• Section 171 of the CGST Act deals with anti­profiteering measures and prescribes that any reduction in the rate of taxon supply of goods or services or the benefit of input tax credit should be passed on to the recipient by way of a commensurate reduction in prices.
• Complaints, which were earlier filed with the National Antiprofiteering Authority, are now handled by the Competition Commission of India.

National Anti-profiteering Authority

• The National Anti-Profiteering Authority (NAA) was constituted under Section 171 of the Central Goods and Services Tax Act, 2017.
• The formation of NAA comes in the background of rate-reduction of a large number of items by GST Council which has made tremendous price reduction effect but the consumers will be benefited only if the traders are making the quick reduction of prices of respective items.

Functions of National Anti-profiteering Authority

• The anti-profiteering clause under the Goods And Services Tax (GST) Act mentions that any reduction in the rate of tax on any goods or services or the benefit of input tax credit must be passed on to the consumer by way of commensurate reduction in the prices of the respective goods or services.
• The Authority’s main function is to ensure that traders are not realizing an unfair profit by charging high price from consumers in the name of GST and to examine and check such profiteering activities and recommend punitive actions including the cancellation of Registration.

Competition Commission of India (CCI):

• CCI, a statutory body of the Government of India, was established in March 2009 under the Competition Act, 2002.
• The goal of CCI is to create and sustain fair competition in the economy that will provide a ‘level playing field’ to the producers and make the markets work for the welfare of consumers.
• The priority of the Commission is to eliminate practices having adverse effects on competition, promote and sustain competition, protect the interests of consumers, and ensure freedom of trade in the markets of India.
• Mandate: To implement provisions of The Competition Act, 2002, which –prohibits anti-competitive agreements and abuse of dominant position by enterprises; regulates mergers and acquisitions (M&A), which can have an adverse effect on competition within India. Thus, deals beyond a certain threshold are required to get clearance from CCI.
• It oversees the operations of big enterprises to ensure they are not abusing their ‘dominant position’ or power by controlling supply, setting up high purchase prices, or adopting practices that are unethical and may harm budding enterprises.

Composition:

• It has the composition of a quasi-judicial body, with one chairperson and six additional members.
• All members of the CCI are appointed by the Central Government.
• Headquarters: New Delhi.