Competition Commission (CCI) to Adjudicate in GST Profiteering Cases, Investigation by GST Officers

· National Anti-profiteering Authority Run by GST Agencies goes from 1 Dec 2022

The decision comes at a time when 50-odd cases against the constitutional validity of NAA have been clubbed and are being heard in the Delhi High Court

Starting next month, the Competition Commission of India (CCI) will look into anti-profiteering measures under the Goods and Services Tax (GST), replacing the National Anti-profiteering Authority (NAA). Experts say the CCI will have to address the challenge of finding out appropriate methodology to gauge profiteering and quantum of penalty over which NAA is embroiled with litigation in courts.

A notification to this effect was issued by the Central Board of Indirect Taxes and Customs (CBIC) on Wednesday.

Apart from omitting and adding rules, the notification says, "The central government, on the recommendation of the Goods and Services Tax Council, hereby empowers the Competition Commission of India ... to examine whether input tax credit availed by the registered person or the reduction of the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him."

The decision comes at a time when 50-odd cases against the constitutional validity of NAA have been clubbed and are being heard in the Delhi High Court. The biggest issue is the lack of methodology to calculate profiteering.

Abhishek Rastogi, founder of Rastogi Chambers, said while 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 profiteering.

He said the extension of the anti-profiteering provisions beyond five years will have to test the waters of constitutionality at some stage as the intent was to provide the anti-profiteering relief only for the transitional phase.

Saurabh Agarwal, tax partner at EY, said it has to be seen how the CCI addresses the methodology for calculation which was absent in NAA proceedings.

The NAA was set up for two years till November 2019 to ensure any reduction in tax rates on any supplies of goods or services or benefits of the input tax credit.

Later, it was extended till November 2021. The GST Council, in its 45th meeting in September last year, gave another one-year extension till November 30, 2022, to NAA and also decided to shift the work to CCI after that.