Cos may lose CGST registration if indulge in profiteering

The proposed anti-profiteering authority can cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes under the Goods and Services Tax (GST) regime.
The five-member National Anti-Profiteering Authority, headed by a secretary-level officer, can order reduction in price commensurate with the lowering of incidence of taxation under the new indirect tax regime.
It also seeks 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, according to the anti-profiteering rules issued today.

However, the Authority, which has been provisioned to be in existence for just two years unless the GST Council extends the tenure, will not be able to take any of these steps suo motu or on its own.
A multi-step approach will have to be followed beginning with each state constituting a Screening Committee which will examine written complaints made about any entity or business earning undue profit.
Such panels would have to necessarily dispose of the complaints within two months. Once they are satisfied of the prima facie nature of the complaint, the same would be referred to the Director General of Safeguards for a proper investigation.

The Director General of Safeguards will issue notices to the interested parties. During its investigation, it can summon any person.

"Every such inquiry shall be deemed to be a 'judicial proceedings'," the rules said.
The Director General of Safeguards would submit its report to the Authority.
"The Authority shall, within a period of three months from the date of receipt of the report from the Director General of Safeguards determine whether a registered person has passed on the benefit of reduction in rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices," the rules said.

The Authority would decide on matters through majority.
All entities would be bound by orders passed by the Authority and an failure would result in action to recover the amount in accordance with the GST law, they added.
The chairman and members of the authority would be appointed by the central government on recommendations of a selection committee constituted by the GST Council.
The chairman would be paid a monthly salary of Rs 2.25 lakh plus other allowances and benefits as are admissible to a central government officer holding posts carrying the same pay.
Technical members shall be paid a monthly salary of Rs 2,05,400.

The chairman and members shall hold office for a term of two years or until the age of 65-years, whichever is earlier.