Goods and Services Tax (GST)

[pib] National Anti-Profiteering Authority (NAA)


Mains Paper 3: Indian Economy| Issues relating to planning, mobilization of resources, growth, development and employment.

From UPSC perspective, the following things are important:

Prelims level: GST, GST COUNCIL, NAA

Mains level: Role and mandate NAA in strengthening GST Infrastructure


National Anti-Profiteering Authority (NAA)

  1. The NAA has been constituted under Section 171 of the Central GST Act, 2017 to ensure that the reduction in rate of tax or the benefit of input tax credit is passed on to the recipient by way of commensurate reduction in prices.
  2. Decision about the formation the NAA comes in the background of rate reduction of large number of items by the GST Council in its 22ndmeeting at Guwahati.
  3. At the meeting, the Council reduced rates of more than 200 items including goods and services.
  4. This has made tremendous price reduction effect and the consumers will be benefited only if the traders are making quick reduction of the prices of respective items.
  5. There was a concern that traders are reluctant to make price cut so that they can make profit.

What is profiteering?

  1. Profiteering means unfair profit realized by traders by manipulating prices, tax rate adjustment etc.
  2. 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.
  3. Conventionally, several traders will have a strong tendency to quickly increase the price of a commodity whose tax rate has been increased.
  4. But on the opposite side, they may delay the price reduction of a commodity whose tax rate has been cut by the government.
  5. A delayed or postponed price reduction helps business firms to make higher profit. The losers here are the consumers.

Functioning of NAA

  1. The Authority’s main function is to ensure that traders are not realizing unfair profit by charging high price from the consumers in the name of GST.
  2. Traders may charge high price from the consumers by naming the GST factor.
  3. Similarly, they may not make quick and corresponding price reduction when the GST Council makes tax cut. All these constitute profiteering.
  4. The responsibility of the NAA is to examine and check such profiteering activities and recommend punitive actions including cancellation of licenses.

Steps 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 upon consumer awareness programmes;
  • Launching a helpline to resolve the queries of citizens regarding registration of complaints against profiteering.
  • Receiving complaints through email and NAA portal.
  • Working with consumer welfare organizations in order to facilitate outreach activities.
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