The National Anti-Profiteering Authority (NAA) has directed GST officials across the country to ensure that the tax rate cuts notified on some COVID-19-related essentials are passed on to consumers.
What is National Anti-Profiteering Authority (NAA)?
The NAA has been constituted under Section 171 of the Central GST Act, 2017 to ensure that the reduction in the rate of tax or the benefit of the input tax credit is passed on to the recipient by way of commensurate reduction in prices.
The decision about the formation of the NAA came in the background of a rate reduction of a large number of items by the GST Council in its 22nd meeting at Guwahati. At the meeting, the Council reduced rates of more than 200 items, including goods and services. This has had a tremendous price reduction effect and the consumers will benefit if the traders make quick reduction of the prices of respective items. There was a concern that traders are reluctant to make price cuts so that they can make a profit.
What is profiteering?
Profiteering means unfair profit realized by traders by manipulating prices, tax rate adjustment, etc. In the context of the newly launched GST, profiteering means that traders are not reducing the prices of the commodities when the GST Council reduces the tax rates of commodities and services.
Conventionally, several traders will have a strong tendency to quickly increase the price of a commodity whose tax rate has been increased. But on the opposite side, they may delay the price reduction of a commodity whose tax rate has been cut by the government. A delayed or postponed price reduction helps business firms to make a higher profit. The losers here are the consumers.
Functioning of the National Anti-Profiteering Authority (NAA)
The Authority’s main function is to ensure that traders are not realizing unfair profit by charging high prices from the consumers in the name of GST. Traders may charge high prices from the consumers by naming the GST factor.
Similarly, they may not make quick and corresponding price reductions when the GST Council makes a tax cut. All these constitute profiteering. The responsibility of the NAA is to examine and check such profiteering activities and recommend punitive actions including the cancellation of licenses.
Steps were taken by the NAA to ensure that customers get the full benefit of tax cuts:
Holding regular meetings with the Zonal Screening Committees and the Chief Commissioners of Central Tax to stress consumer awareness programs; Launching a helpline to resolve the queries of citizens regarding registration of complaints against profiteering. Receiving complaints through email and the NAA portal.
Working with consumer welfare organizations in order to facilitate outreach activities.
.
Read More Articles on Current Affairs
Follow on Youtube – Score Better
Join Us on Telegram for More Update
.