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The Directorate General of Safeguards, which probes profiteering complaints under GST, has issued investigation initiation notices in 53 cases, Parliament was informed on Tuesday.
In a written reply to a question in the Rajya Sabha, Shukla said till February 23, the Standing Committee received 354 complaints alleging that the benefits of reduction in tax rate or input tax credit have not been passed on to the consumers.
"Notices of initiation of investigation have been issued by the Directorate General of Safeguards in respect of 53 applications," Shukla said.
The Standing Committee have sent back 68 applications to the jurisdictional GST authorities as not being anti-profiteering applications and 59 applications to the respective state-level screening committees for reconsideration, he added.
As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature will be first sent to the state-level 'screening committee' while those of national level will be marked for the 'Standing Committee'.
If the complaints have merit, the respective committees would refer the cases for further investigation to the Directorate General of Safeguards (DGS). The DG Safeguards would generally take about three months to complete the investigation and send the report to the anti-profiteering authority.
If the authority finds that a company has not passed on GST benefits, it will either direct the entity to pass on the benefits to consumers or if the beneficiary cannot be identified will ask the company to transfer the amount to the 'consumer welfare fund' within a specified timeline.
The authority will have the power to cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes under the GST regime, but it would probably be the last step against any violator.
According to the anti-profiteering rules, the authority will suggest return of the undue profit earned from not passing on the reduction in tax to consumers along with an 18 per cent interest as also impose penalty.