NAA asks for extension of its term as 700 cases are under investigation

Making a case for extension of its term, the goods and services tax (GST) anti-profiteering watchdog has informed the GST Council officers that about 700 cases are currently under investigation.
 
With the National Anti-Profiteering Authority’s (NAA’s) tenure coming to an end in November according to the two-year sunset clause, the case for extension will be taken up by the council in the June 20 meeting.
 
With a disposal rate of about 6-7 cases a month so far, the body may need an extension of at least two and half years to three years, according to officials. NAA chairman BN Sharma has informally asked the GST Council for an extension as there were pending cases.
 
In response, the council had asked for data on the number of orders passed and the status of pending cases to come to a decision on the extension.
 
Besides, the watchdog will be needed till the time the GST converges to a single rate and possibility for rate reductions, feel government officials.
 
In addition, items like petroleum, alcohol and part of real estate are still out of the ambit of GST, which will be introduced at a later stage, requiring the anti-profiteering to stay for a longer term.

“We feel that the NAA will certainly need an extension as there are several cases pending. Besides, there is still huge scope for rejig in rates on several items,” said a government official.

However, specific timeline for extension may not be proposed, and will be left to the GST Council to decide.
 
“The term of extension will be decided by the council itself. The agenda item will only propose time extension of the NAA as deemed fit by the council,” said another official.
 
The NAA has passed orders in close to 60 cases so far, and in about 13, the parties have been found guilty of profiteering.
 
There are five tax slabs under GST – 3 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent – at the moment. The government eventually wants to converge the 12 per cent and 18 per cent slab to around 15 per cent. After a few rounds of rate reductions, still about 37 items remain in the top tax slab of 28 per cent, which may be reduced later.
 
The half day meeting (on June 20) will be the first one with Union Finance Minister Nirmala Sitharaman as chairman of the council.
 
The NAA is chaired by BN Sharma and is assisted by four senior officials of the rank of joint secretary and above. According to the anti-profiteering rules under GST, “Benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.”
 
It is still catering to complaints related to the rate reductions made in July last year on a number of consumer durables like small screen TVs, refrigerators and washing machines as well as on 178 items in November 2017, including detergents, shampoos and beauty products.
 
The anti-profiteering mechanism is a three-stage process. There is a state-level screening committee for local complaints and a standing committee for national-level complaints. Then, there is investigation by the directorate general of anti-profiteering and then a probe by the decision-making body, the NAA.