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CCI to look into anti-profiteering steps under GST, replace NAA from Dec

The decision comes at a time when 50-odd cases against the constitutional validity of NAA have been clubbed and are being heard in the Delhi High Court

Competition Commission of India CCI | GST | Delhi High Court

Indivjal Dhasmana  |  New Delhi 

Photo: PTI
Photo: PTI

Starting next month, the Competition Commission of India (CCI) will look into anti-profiteering measures under the Goods and Services Tax (GST), replacing the (NAA). Experts say the will have to address the challenge of finding appropriate methodology to gauge profiteering and quantum of penalty over which is embroiled with litigation in courts.

A notification to this effect was issued by the Central Board of Indirect Taxes and Customs (CBIC) on Wednesday.

Apart from omitting and adding rules, the notification says, "The central government, on the recommendation of the Goods and Services Tax Council, hereby empowers the Competition Commission of India ... to examine whether input tax credit availed by the registered person or the reduction of the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him."

The decision comes at a time when 50-odd cases against the constitutional validity of have been clubbed and are being heard in the . The biggest issue is the lack of methodology to calculate profiteering.

Abhishek Rastogi, founder of Rastogi Chambers, said while this is an expected move based on the recommendation of various states, it will be interesting to see whether provides for a methodology for diverse sectors before progressing into quantum profiteering.

He said the extension of the anti-profiteering provisions beyond five years will have to test the waters of constitutionality at some stage as the intent was to provide the anti-profiteering relief only for the transitional phase.

Saurabh Agarwal, tax partner at EY, said it has to be seen how the addresses the methodology for calculation which was absent in proceedings.

Karan Sachdev, partner Lakshmikumaran and Sridharan Attorneys, said CCI has a working knowledge of various business dynamics impacting price and it is well equipped to handle such cases.

Even in Australia, anti-profiteering violations were examined by the Australian Competition and Consumer Commission.

“With its prior expertise, it will be interesting to see how the CCI interprets and enforces the anti-profiteering provision and whether it adopts a different approach than NAA,” he said.

The NAA was set up for two years till November 2019 to ensure any reduction in tax rates on any supplies of goods or services or benefits of the input tax credit.

Later, it was extended till November 2021. The Council, in its 45th meeting in September last year, gave another one-year extension till November 30, 2022, to NAA and also decided to shift the work to CCI after that.

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First Published: Thu, November 24 2022. 11:16 IST