GST laws: What the row over ‘profiteering’ is all about
The Supreme Court recently issued a notice to the Centre on the “anti-profiteering provisions” in the Central Goods and Services (CGST) Act, as well as the rules issued, on an appeal against a Delhi High Court ruling. Priyansh Verma explains what the mechanism is meant for, and the controversy around it
l What are the anti-profiteering norms?
THE GOODS AND Services Tax (GST), due to its comprehensive nature, and embedded facility of seamless credits to businesses for input taxes, was supposed to have a sobering effect on prices. The government is keen the benefits of any reduction in tax rate and input tax credit for businesses reach the final consumers by way of a commensurate reduction in the prices of then relevant goods and services.
To be precise, Section 171 of the CGST Act says any wilful action of not passing on these benefits to the recipients will be treated as “profiteering”. Chapter XV of the CGST Rules, 2017 contains the detailed procedure for this, and National Anti-Profiteering Authority (NAA) was set up in 2017 with the mandate to implement it. The NAA, however, hasn’t been very effective in recovering the amounts clocked by firms via profiteering, and it was dissolved in December 2022. Since then, the Competition Commission of India (CCI) has been dealing with the cases of profiteering.
