Explainer: Why govt disbanded the NAA and why GST 2.0 may revive it
The government is considering reviving anti-profiteering provisions for a limited two-year period as part of the transition to a restructured Goods and Services Tax (GST), widely referred to as GST 2.0. The move is aimed at ensuring that businesses pass on tax cuts to consumers, rather than absorbing the gains.
The move signals a possible comeback of a regulatory framework that was dissolved in 2022 and integrated with the Competition Commission of India (CCI).
What was the National Anti-Profiteering Authority (NAA), and why does India need a dedicated mechanism to police profiteering under GST 2.0?
What is anti-profiteering activity?
Under the GST law, any reduction in tax rate or gain from input tax credit (ITC) must be passed on to consumers through a commensurate cut in prices. Failure to do so constitutes “profiteering”.
The provision was designed to prevent companies from pocketing benefits from GST rationalisation instead of transferring them to consumers.
