Profiteering Defined:
Profiteering, under Section 171 of the CGST Act, is the failure to pass on the benefits of tax rate reduction or input tax credit to consumers by reducing prices.
Background of Anti-Profiteering:
Originating from VAT implementation experiences, anti-profiteering provisions were introduced in GST to prevent businesses from profiting at the expense of tax reductions.
Statutory Provisions:
Section 171 of CGST Act mandates passing on tax benefits to consumers. Chapter XV of CGST Rules details the mechanism and procedure for anti-profiteering.
Sunset Clause:
Rule 137 sets a two-year limit for the existence of the Anti-Profiteering Authority unless the GST Council recommends otherwise.
Instances Triggering Anti-Profiteering:
Reduction in tax rates or the benefit of Input Tax Credit (ITC) should result in a commensurate reduction in prices to avoid anti-profiteering scrutiny.
Role of National Anti-Profiteering Authority (NAA):
NAA ensures the benefits of tax reductions or ITC are genuinely reflected in prices. It holds the power to order price reduction, return of unpassed benefits, and impose penalties.
Consumer Complaint Redressal:
Consumers can register complaints against profiteering via online platforms, mail, or post. The detailed process involves screening committees, investigation, and action by NAA.