The recent meeting of the GST Council featured a discussion about a proposal to extend the tenure of the National Anti-profiteering Authority (NAA) until 30 November 2020, an extra year on its original mandate. The NAA was formed in the wake of the GST rollout, with a mission to address consumer complaints against companies that we’re not passing on benefits from GST rate cuts. Considering numerous unresolved cases, an extension for the NAA is seen as necessary before its dissolution.
Understanding the National Anti-profiteering Authority
Established under Section 171 of the Central Goods and Services Tax Act, 2017, the National Anti-Profiteering Authority (NAA) was created as a direct response to the implementation of the Goods and Service Tax (GST). This decision was made in light of an extensive reduction in the rate of many items by the GST Council, leading to a substantial drop in prices. However, consumers can only benefit from this if traders promptly reduce the prices for their goods or services.
Main Functions of the National Anti-profiteering Authority
According to the anti-profiteering clause under the GST Act, any reductions in the tax rate on goods or services and the benefits from input tax credit must be passed onto the consumer through corresponding reductions in the prices of the respective goods or services. The NAA’s primary function is to ensure traders are not unfairly profiting from high prices charged to consumers under the pretext of GST. It is empowered to examine and curb such profiteering activities, and it can recommend punitive actions including registration cancellation.
Governance Structure of the National Anti-profiteering Authority
The governance structure of the NAA includes: a Chairman, four Technical members, a Standing Committee, Screening Committees in every state, and the Directorate General of Safeguards within the Central Board of Excise & Customs (CBEC). The NAA’s orders can only be appealed against in the high court.
Facts About National Anti-profiteering Authority (NAA)
| Fact | Detail |
|---|---|
| Established Under | Section 171 of the Central Goods and Services Tax Act, 2017 |
| Primary Responsibility | Ensure benefits of GST rate cuts are passed to consumers |
| Structure | Comprises Chairman, four Technical members, a Standing Committee, Screening Committees in every state, and the Directorate General of Safeguards within the CBEC |
| Appealing Against NAA Orders | Can only be appealed against in the high court |
The Need for Tenure Extension
The potential extension of the NAA’s tenure is attributed to the large number of pending cases that require attention. It has been proposed to extend the tenure for an additional year, until 30 November 2020, in order to resolve these matters more efficiently. This is deemed necessary to ensure the continued protection of consumers and the enforcement of fair trading practices in relation to the GST.
