The National Anti-Profiteering Authority (NAA) is a crucial body in the Goods and Services Tax (GST) regime. It was created by the Central Government under the Goods and Services Tax (GST) Act, 2017 (Section 171). In this article, you will learn about National Anti-profiteering Authority, Members & Structure, Functions & Power, etc.
This article will provide key insights for GS Paper-III Economy of UPSC IAS Exam.
Table of Content
- What is National Anti-profiteering Authority?
- Members & Structure of National Anti-profiteering Authority
- Functions & Power of National Anti-profiteering Authority
- Anti-Profiteering Mechanism Under GST Regime
- Conclusion
- Frequently Asked Questions
What is National Anti-profiteering Authority?
- The National Anti-profiteering Authority (NAA) is a government agency that aims to ensure that the reduction in Input Tax Credit (ITC) or tax benefit is appropriately passed on to consumers through price reductions.
- It was established under Section 171 of the Central Goods and Services Tax Act in 2017.
- The NAA helps protect consumers from unjustified price hikes in the name of Goods and Services Tax (GST).
Members & Structure of National Anti-profiteering Authority:
- This authority comprises a five-member committee, including:
- Chairman– equivalent to a government secretary
- 4 technical members– present or former commissioners of State or central tax departments.
- The Secretary to NAA is the Additional Director General of Safeguards under the Central Board of Indirect Taxes and Customs (CBEC).
- Initially, the committee has served a two-year tenure, which can be extended if deemed necessary by the GST Council.
- It has a 3-tier structure where there is a standing committee on Anti-profiteering, State level screening committee and the NAA as its apex body.
Functions & Power of National Anti-profiteering Authority:
- It focuses on determining whether any reduction in the tax rate on goods or services is reflected proportionally in lower prices for consumers.
- NAA identifies registered entities that have not passed on tax reduction benefits through ITC and takes appropriate action against them.
- In extreme cases of non-compliance, NAA can deregister a business that fails to pass on GST benefits to customers.
- As a measure against violators, the NAA can recommend the return of undue profits earned by businesses that did not pass on tax benefits, along with an 18% interest.
- The NAA can also take Suo Motu action including acting on the recommendations of the standing committee.
- It can also impose penalties if necessary.
- However, deregistering a business shall be considered as aa last resort and taken only in severe cases of non-compliance.
Anti-Profiteering Mechanism Under GST Regime:
- Complaints received regarding profiteering are handled based on their jurisdiction.
- Local complaints are initially reviewed by a state-level committee for screening, while national-level complaints are directly sent to the standing committee.
- In cases where the incident of profiteering is related to a widely consumed item with nationwide impact, the application can be directly made to the Standing Committee.
- Once complaints are found to have merit, the respective committees refer the cases for further investigation to the Directorate General of Safeguards.
- The Directorate General of Safeguards typically takes about 3 months to complete the investigation and submit the report to the NAA.
- Upon receiving the investigation report, if the NAA determines that a company has not passed on GST benefits, it can issue directives to the entity to pass on the benefits to consumers.
- If the recipient of the benefit cannot be identified, the NAA can ask the company to transfer the amount to the ‘consumer welfare fund’ within a specified timeframe.
Conclusion
The National Anti-Profiteering Authority (NAA) has played a crucial role in ensuring the success of the Goods and Services Tax (GST) by safeguarding consumer interests. Simplifying procedures and leveraging technology can expedite case resolution and reduce the administrative burden on all stakeholders. Equipping NAA with robust data analysis capabilities and fostering cooperation with tax authorities can enhance its effectiveness. Raising public awareness about NAA’s role and grievance redressal mechanisms can empower consumers to become active participants in ensuring fair pricing.
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FAQs(frequently asked question)
What is the National Anti-Profiteering Authority?
The National Anti-Profiteering Authority (NAA) is a government agency that aims to ensure that the reduction in Input Tax Credit (ITC) or tax benefit is appropriately passed on to consumers through price reductions.
Who replaced the National Anti-profiteering Authority?
Competition Commission of India had replaced the National Anti-profiteering Authority.