National Anti-Profiteering Authority Current Affairs - 2019

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Badri Narain Sharma reappointed NAA Chief

Appointments Committee of Cabinet, chaired by Prime Minister Narendra Modi, has reappointed Badri Narain Sharma as chairman of National Anti-profiteering Authority (NAA) for 2 years. B N Sharma a 1985-batch IAS officer from Rajasthan was due for retirement on August 2019.

About National Anti-profiteering Authority (NAA)

NAA was constituted in 2017. It ensures that consumers get benefit of reduced prices under Goods and Services Tax (GST).

Structure: At present NAA has 3 members- J C Chauhan, Chairman, Tax Tribunal, Himachal Pradesh and Indian Revenue Service (IRS) officers R Bhagyadevi and Amand Shah.

Mandate: To protect consumer interests by ensuring that benefits of input credit and reduction in GST rates on specified goods or services are passed on to them by way of commensurate reduction in prices.

NAA has power to cancel registration of any entity/business if it fails to pass on to consumers benefit of lower taxes under GST regime, but it would probably be last step against any violator.

As per Anti-Profiteering Mechanism’s structure in GST regime-

  • Local level Complaints are 1st sent to state-level screening committee.
  • National level Complaints are marked for standing committee.

Delhi HC stays fine on HUL for GST profiteering

On the plea by Hindustan Unilever Ltd (HUL) against the order given by the National Anti-profiteering Authority (NAA), the Delhi High Court has stayed the fine imposed on HUL.

Why the HUL has sought a review?

The HUL has sought the review of the order of NAA before the Delhi High Court based on the following reasons:

  • NAA has made a narrow interpretation of the law and did not take into account the well-established industry practice backed by law.
  • NAA order is arbitrary since no methodology has been determined by the NAA as required under law to determine if the benefit has been passed or not.
  • Absence of any prescribed method in the GST law to calculate the undue profit earned.

HUL case is one among the others

The various decisions of the NAA are now questioned in the various High Courts.  Even the real estate firm Pyramid Infratech has moved the high court against the order of NAA.

Why the issue has become complicated?

Section 171 of the CGST act deals with profiteering. It aims to ensure that reductions in the rate of tax on any supply of goods or services or the benefit of the input tax credit are passed on to consumers and empowers the central government to constitute authority for that purpose. The National Anti-profiteering Authority (NAA) was established by the central government under this provision.

But the absence of a clearly defined method to calculate the undue profit earned has become the bone of contention. The absence of rules has created a vacuum and resulting in ambiguity in dealing with anti-profiteering measures.