FAQs on Anti-profiteering system under GST

Sakshi Jain
Sakshi Jain at March 07, 2023

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Anti-Profiteering System FAQs

Before starting off with the FAQs on Anti-profiteering system under GST, it is important for us to know the basics of it. In this article we will cover all the FAQs related to the anti-profiteering system under GST:

Q1. What is profiteering?

Ans: Profiteering means to make or look to make an exorbitant or unjustifiable profit, particularly illegally.

Q2. What are the legal provisions that administer the Anti-profiteering?

Ans: The Sec. 171 of CGST/SGST Act, 2017 and the Rule 122 to Rule 137 of the CGST/SGST Rules, 2017 states the applicable legal provisions, including the managerial and procedural parts of the Anti-profiteering.

Q3. What is the regulatory structure for implementing the Anti-Profiteering (AP) provisions?

Ans: CGST and SGST Act, 2017 orders a 3-level structure for the investigation, scrutiny, and adjudication of the complaints with respect to profiteering. They are:

(1) The National Anti-profiteering Authority (NAA) –is the Apex body, at the National level – embraces adjudication of Anti-Profiteering;
(2) The Directorate General of Anti-profiteering (DGAP), prior known as DG-Safeguards, investigate the objections alluded to by the Standing Committee; and
(3) The Standing Committee (SC) at the National level, upheld by the State Screening Committees (SSC) comprised at each State – scrutinizes the applications got.

Q4. Who can document a complaint against profiteering?

Ans: Any individual which incorporates a consumer or dealer, provider, recipient, any association or the Commissioner of GST, encountering or seeing the non-reduction in the price of the Goods or Services, in equivalent with the decrease in the rate of GST or the advantage of Input Tax Credit, can record the complaint under the anti-profiteering provisions. However, legitimate proof needs to be attached along with the complaint.

Q5. How to look for direction/explanations with respect to recording of complaints against profiteering?

Ans: NAA, Delhi has built up an Anti-profiteering Helpline: 011-21400643, which gives data identifying with the rules for enlisting an objection against profiteering or to determine any questions in regards to registration of complaints.

Q6. How to know the status of the complaint against profiteering?

Ans: The complainant can follow the application documented online through the 'track complaint' option accessible on the website www.naa.gov.in, in the event that it was recorded on the web.

In any case, the complainant can contact the Directorate General of Anti-profiteering at:

(i) Phone Number: 011-23741544 or 011-23741542
(ii) e-mail: anti-profiteering@gov.in, to look for status.

Q7. What moves can be made by NAA against an individual who had not passed on the advantage of a decrease in the rate of GST or the advantage of ITC, by non-decrease of the price of the provisions?

Ans: Where it is discovered that a registered individual had not passed on the advantage of the decrease in the rate of GST on the supply of Goods or Services; or the advantage of ITC to the recipient by a method of equivalent decrease in prices, NAA may arrange:

(a) the decrease in prices;
(b) revert to the recipient an amount equivalent to the amount not passed on, with interest @ 18%;
(c) deposit of the unlawful benefit collected to the Consumer welfare finance (CWF);
(d) Penalty; and
(e) Canceling the registration of the provider.

Q8. Is the complainant qualified to recoup the amount by virtue of his complaint against profiteering?

Ans: As far as Rule 127 read with the Rule 133 of CGST and SGST Rules, 2017, The National Anti-profiteering Authority can ask the defaulter to pay back to the recipient, an amount proportionate to the amount not passed on, by the method of equivalent decrease in prices alongside interest at the rate of 18% from the date of collection of higher amount till the date of return of such amount. In such a case, it is just the recipient of Goods/Services is qualified to get the amount.

Q9. What happens to the amount returned by the defaulter when the eligible individual doesn't guarantee such amount or the individual who was qualified for the said amount isn't recognizable?

Ans: Under section 57 of the GST Act, Consumer Welfare Fund (CWF) was made by the Central Government which would be used for the welfare of the consumers in the nation. At the point when the amount including interest can't be returned under any circumstances like – the eligible individual doesn't guarantee such amount or such individual isn't recognizable, the recouped amount will be deposited in Central and State – Consumer Welfare Fund established, in equivalent extents.

Q10. What is the system to deposit the amount which couldn't be given to the recipient in the Consumer Welfare Fund?

Ans: Profiteered amount will be paid by method of Check/Demand Draft for the PAO (Hq. CBIC) New Delhi, which will be sent to "The Pr. Chief Controller of Accounts, CBIC, first Floor B-Wing, DGARC Building, I.P. Estate, New Delhi-110002. {Tel.No: 011-23702310/email: gstcell-hq@gov.in}". In the covering letter sending such Check/DD, mention that the said amount will be deposited under the Head of Account of Consumer Welfare Fund, under the accounting code: "Demand No. 900; Major Head: 0047 – Other Fiscal Services 00.800 – Other Receipts."

Q11. As the profiteered amount contains both CGST and SGST, would it be able to be deposited altogether in the Central Consumer Welfare Fund?

Ans: In the event that the profiteered amount relates to inter-state supply the whole amount should be deposited in Central Consumer Welfare Fund; and the SGST segment of such amount would be given to the concerned State Consumer Welfare Fund (State-CWF) along these lines according to the component recommended. In any case, if the profiteered amount relates to intra-state supply, half of the amount will be deposited in the Central Consumer Welfare Fund and the half in the State Consumer Welfare Fund account. Be that as it may, if the Head of Account for State-CWF isn't made or known, the whole amount can be sent to Pr. CCA, New Delhi as referenced above.

Q12. What are the records to be submitted alongside the form (APAF-1) for complaining about profiteering?

Ans: The provisions of GST law have not determined any documents for the said reason. However, the following documents need to be submitted along with APAF-1 form:

(i) The invoice or bills are given by the provider before and after the decrease in the rate of tax and tax amount;
(ii) The documents showing the details of the Goods/Services (if the invoices don't reflect genuine depiction – like the agreement or item brochure and so forth.)
(iii) The documents showing non-figuring the advantage of ITC accessible in price;
(iv) The worksheet showing the reason for not passing the benefits of the decrease in the cost and so on.

Q13. Is there any monitoring system for the order passed by the National Anti-Profiteering Authority (NAA)?

Ans: An order passed by National Anti-Profiteering Authority (NAA) shall be immediately followed by the registered person against whom the order is passed. In case if that person fails to do so action against him or her will be taken as per the provisions mentioned in rule 135 of the GST Act.
Further, as per rule 136 of the GST Act, NAA may require any authority of Central Tax, State-Tax, or Union Territory Tax to screen the execution of the order passed by it.

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