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All About National Anti-profiteering Authority (NAA)

Prakash Matre
Prakash Matre at March 17, 2023

NAA Full Information

The National Anti-profiteering Authority (NAA) was established under Section 171 of the Central Goods and Services Tax (CGST) Act, 2017. The NAA was set up to screen and to administer whether the benefits of input tax credit (ITC) are received by the recipient by a decrease in costs. National Anti-profiteering Authority (NAA) is was then created by the central government to dissect whether input tax credits claimed by any registered individual or the decrease in the value is passed onto the shopper and he/she is shielded from irregular cost increment for personal gain in the name of GST.

NAA Framework

The National Anti-profiteering Authority involves a five members committee, comprising of, a Chairman (equal to a position of secretary in the administration), four specialized members (present/previous commissioners of State or central tax departments). The Additional Director General of Safeguards under the CBIC (Central Board of Indirect Taxes and Customs) would be the Secretary to NAA.

Tenure of NAA Committee

The National Anti-profiteering Authority committee will at first have a two-year tenure that can be extended by the GST Council if they find it suitable for future events.

AIM of National Anti-profiteering Authority

The main aim of NAA is to guarantee the benefits of a lower tax rate under the new GST system are passed onto the end customers. This is to discover that if any decrease in the GST rate on goods or services is passed onto the recipient by the method of the relative decrease in costs.

Aside from this, the NAA additionally recognize the registered taxable person who has not passed on the benefit of tax rate reduction to the end consumer and make them compliant.


Powers of NAA

Here is the list of powers that are assigned to NAA:

(i) NAA has the authority to de-register any person or business if they neglect to pass on the advantage of a lower interest rate under GST to the client. However, de-registering a business will be the last strategy and extreme step against any violator

(ii) NAA will suggest the return of undue profit which a business has earned by not passing the benefit of GST rate reduction along with an interest of 18 percent.

(iii) NAA can also impose a penalty on violators in case if the committee finds it suitable.

How Anti-Profiteering works Under GST works?

Here is how anti-profiteering works under GST:

(i) Complaints depend on jurisdiction. Local complaints are first sent to a state-level committee for screening

(ii) Grievances at a national level are sent directly sent to the standing committee

(iii) The complaint might be straightforwardly made to the Standing Committee in case of product(s) that are mass consumption.

(iv) If the complaint has merit, committees refer the cases for additional examination to the Directorate General of Safeguards.

(v) The Director-General of Safeguards will take around 3 months to finish the examination and send the report to NAA.

(vi) In the event that the NAA finds that the organization has not passed on GST benefits, it will either direct them to pass on the advantages to buyers. In case if the recipient can't be distinguished, it will request that the organization move the sum to 'consumer welfare fund’ within a predefined time.

The Bottom Line

National Anti-Profiteering Authority is a twofold check framework implemented to guarantee costs stay under check and organizations are passing on the benefits to the end consumer. NAA additionally ensures that undue profiteering at the cost of a common man, who is perpetually the end consumer doesn't occur.

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