Anti-profiteering body is toothless

New Delhi, June 13: The proposed anti-profiteering authority under the goods and services tax (GST) regime is likely to be a toothless tiger with no powers to levy penalty or even suo motu take up investigation.

The GST Council earlier this month agreed on broad principles of the anti-profiteering rules, a senior government official told PTI here.

According to the rules agreed upon, when a complaint is received about any company or a trader making undue profit by not passing on the benefit of lower tax incidence because of GST, it would be referred to a standing committee appointed by the Council.

The committee would decide whether an inquiry should be initiated on the complaint. The new anti-profiteering authority will carry out an investigation only when the committee recommends so.

The inquiry report with recommendations would be referred back to the committee, the official said, adding that any penalty or action would be taken by either the committee or the Council.

To carry out the investigation, the new authority will be a fulltime body with “unfettered” powers to issue summons, including to the top management of companies that are alleged to have profiteered. But the power to levy penalties may rest with the all powerful GST Council or the Standing Committee of tax officers.

At present, except Trai, all regulators and the CCI have powers to levy penalty in case of violation of any rule or law. The GST anti-profiteering authority will be the only institution which will not have the same.

As per the rules being framed for the authority, not all cases of profiteering can be taken up for scrutiny and a minimum threshold of making undue gains from the new regime could only be brought up for scrutiny, a senior government official told PTI here.

“A notification on the anti-profiteering authority will be issued shortly with details of rules and procedures to be followed,” he said.

Only those cases of profiteering that are above the threshold would be taken up for investigation and matters below that would be ignored, he said.

AT PRESENT, except Trai, all regulators and the Competition Commission of India have powers to levy penalty in case of violation of any rule or law.

THE GST anti-profiteering authority will be the only institution which will not have the same power to levy penalty.