COMPETITION COMMISSION OF INDIA EMPOWERED TO EXAMINE ANTI-PROFITEERING CASES
CBIC has notified that effective from 01 December 2022, the Competition Commission of India (CCI), established under Section 7(1) of the Competition Act, 2002, is empowered to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
Consequently, CCI would replace the existing National Anti-Profiteering Authority (NAA) with effect from 01 December 2022.
[Notification no:23/2022-Central Tax dated 23 November 2022]
CONSEQUENTIAL AMENDMENTS TO THE CENTRAL GOODS & SERVICES TAX RULES, 2017 (CGST Rules) (effective 01 December 2022)
Pursuant to the above, consequential changes were made to the CGST Rules and the following rules have been omitted:
1. Rule 122 – Constitution of NAA
2. Rule 124 - Appointment, salary, allowances and other terms and conditions of service of the Chairman and
Members of NAA
3. Rule 125 - Secretary to NAA
4. Rule 134 – Decision to be taken by the majority
5. Rule 137 – Tenure of NAA
Further, Explanation (a) (after Rule 137 of the CGST Rules) has been amended to stipulate that the authority notified under Section 171(2) of the CGST Act (i.e., CCI) would be treated as the Authority. In addition to the above, in Rule 127 of the CGST Rules, the phrase “It shall be the duty of the Authority” has been replaced by the phrase “The Authority shall discharge the following functions, namely”.
[Notification no:24/2022-Central Tax dated 23 November 2022]
BDO Comments
It had already been announced that the CCI would replace the NAA and now the notification is issued to empower CCI to handle the anti-profiteering complaints. While the CGST Rules prescribed a specified tenure for NAA, which was extended from time to time, now the rule laying down the tenure has been removed altogether. This practically results in the anti-profiteering provisions being a permanent provision under the GST laws, as opposed to the initial understanding that the anti-profiteering provisions were meant to be transient. While the constitutionality of the anti-profiteering provisions is being debated before the Courts, the industry would look forward to a uniform methodology being prescribed to determine the profiteering and the quantum of profiteering, if any.