The Competition Commission of India (CCI) will address profiteering issues related to the goods and services tax (GST) from December 1 this year. The Central Board of Indirect Taxes and Customs (CBIC) has notified a change to this effect.
“…the Central Government, on the recommendations of the Goods and Services Tax Council, hereby empowers the Competition Commission of India established under sub-section (1) of section 7 of the Competition Act, 2002 (12 of 2003), 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,” the CBIC said, adding that the notification will come into force with effect from December 1, 2022.Till now, this was being done by the National Anti-profiteering Authority (NAA), which addresses all consumer complaints relating to profiteering under GST.
The NAA is the statutory mechanism under GST law to check unfair profiteering activities by registered suppliers under the GST law. Its term ends on November 30. This follows a decision by the GST Council in its 45th meeting in September last year, when it gave a one-year extension to the NAA, after which its work would be taken over by the CCI.
According to sources, a separate wing may be set up within the CCI to address GST related issues. At present, the CCI focusses on eliminating practices that have an adverse effect on competition and works to promote and sustain competition, protect consumer interests and ensure freedom of trade in the markets.
MS Mani, partner, Deloitte India, noted that with the CCI being notified as the body to evaluate GST anti-profiteering matters from December 1, the industry would expect some guidelines to aid in the determination of profiteering or otherwise. “Ideally, market forces should determine pricing and recourse to CCI should be made only in very exceptional cases,” he said.
Abhishek A Rastogi, founder of Rastogi Chambers, said this is an expected move based on the recommendation of various states. “It will be interesting to see whether CCI provides for a methodology for diverse sectors before progressing into quantum of profiteering,” he said.