Above: Union Finance Minister Arun Jaitley chairing a GST Council meeting. Photo: UNI

With the imposition of GST just hours away, the GST Council, headed by Union Finance Minister Arun Jaitley, has constituted an Anti-profiteering Authority (ApA) to ensure that benefits accruing from any dip in tax levels through GST are passed on to the ultimate consumers and not held back for extra profiteering by companies.

The ApA will comprise a five-member committee, headed by a chairman who holds or has held a post equivalent in rank to a secretary to the government of India, as per media reports. There will also be four technical members who are or have been commissioners of state tax or central tax or have held an equivalent post under the existing law.

All will be nominated by the council.

The ApA is being given high powers. It will be acting on complaints, but will have the powers to also to take suo motu action.

The directives and orders passed by this committee will have to be implemented by central tax, state tax or union territory tax authorities. The committee will follow guidelines laid down by the Central Board of Excise And Customs-notified Anti-profiteering Rules, 2017. These will also be inconsonance with Sections 164 and 171 of the Central Goods and Services Tax Act, 2017(12 of 2017).

The primary observation in Section 171 of Central GST Act is about the reduction in rate benefits being passed on to the consumer with commensurate reduction in prices.

The ApA has the power to order a reduction in prices, impose a penalty, and even cancel registration of a company which does not adhere to the instructions.

Any initial complaint will be looked into first by state authorities for verifying the claims. That will be done by a state-level screening committee. A confirmed non-conformist company will be referred to the Standing Committee which will then refer it to the Director General of Safeguards for further investigation which will be completed in three months. This report will go to the ApA.

The ApA’s terms of reference says that it will start its work after July 1 when the GST is launched and cease to exist after two years.

Which means that the ApA will basically set the ball rolling in the process which then can be carried out by the existing authorities.

—India Legal Bureau