National Anti-profiteering Authority

The Government has approved the constitution of a National Anti-Profiteering Authority (NAA) – the institutional mechanism under the GST law to check the unfair profit-making activities by the trading community. Union Cabinet chaired by the PM decided for the appointment of a Chairman and Technical Members of the Authority.

Introduction:

National Anti-profiteering Authority is an apex body which is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.

Just for additional information: It is headed by Secretary level officer to GOI and 4 technical members from state and/or Center.

Points to be covered:

Mandates:

·         Anti-profiteering measures.

·         Pass reduction benefits to consumers.

·         Consumer welfare fund.

·         Penalty

·         Cancellation of registration.

Need for NAA in post GST India.

1.    Monitoring:

·         Profiteering: Firms in order to derive quick profits may not pass on benefits to consumers. Ex: One fast food MNC chain had not passed on reduction benefit to consumers.

·         GST: Without passing, the objectives of reducing GST won’t be fulfilled.

1.    Past experiences: Have shown the benefits have not been passed on.

2.    Rate changes: There are provisions for revision of rates even further.

Conclusion:

Protecting the interests of both consumers and Business houses is the responsibility of government.  Even if one is compromised then economic prosperity is compromised in long run. Thus constitution of the NAA shall bolster confidence of consumers as they reap the benefits of the recent reduction in GST rates, in particular, and of GST, in general.