Prime Minister Narendra Modi-headed Cabinet may also approve creation of the post of chairman and four technical members of the authority tomorrow, officials said.
To keep a tab on businesses that have not passed on to consumers the benefit of lower tax rates under the GST regime, the GST Council had approved setting up of a five-member National AntiProfiteering Authority.
The authority will have a sunset date of two years from the date on which the chairman assumes charge. The chairman and the four members of the authority have to be less than 62 years.
The chairman, who would be a secretary level officer, shall be paid a monthly salary of Rs 2.25 lakh plus other allowances and benefits of similar ranking officers. If a retired officer is selected as chairman, he will be paid a monthly salary of Rs 2.25 lakh reduced by the amount of pension.
The technical members will be paid a monthly salary of over Rs 2.05 lakh plus allowances and benefits as applicable to an additional secretary rank officer.
The officers who are or have been commissioner of state tax or central tax or have held equivalent post under the excise, Customs or VAT laws will be eligible for appointment as technical members in the authority.
The additional director general in the Directorate General of Safeguards (DGS) will act as secretary to the anti-profiteering authority.
The chairman and members of the authority will have a term of two years or until they attain the age of 65 years, whichever is earlier, and shall be eligible for reappointment.
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 antiprofiteering rules, the authority will suggest return of the undue profit earned from not passing on the reduction in incidence of tax to consumers along with an 18 per cent interest, as also impose penalty.
A five-member committee, headed by Cabinet Secretary P K Sinha, comprising Revenue Secretary Hasmukh Adhia, CBEC Chairman Vanaja Sarna and chief secretaries from two states, has been entrusted to finalise the chairman and members of the authority.
A four-member Standing Committee, comprising tax officials of the Centre and states, has already been set up to receive complaints of undue profiteering by any entity under the GST regime.
The Standing Committee on anti-profiteering will act as a complaint processing machinery and will refer any case it finds fit for investigation to the DGS.