Browsed by
Tag: National Anti Profiteering Authority (NAA)

Advance Ruling Authority under GST: Does it really solve the taxpayer’s issues?

Advance Ruling Authority under GST: Does it really solve the taxpayer’s issues?

Since the advent of GST Laws, trade and industry have faced multifarious issues relating to uploading of returns, availing legacy Cenvat credit under TRAN-1 form, various confusions regarding the generation of e-way bills and many other such small issues.

When the Government introduced the Advance Ruling Authority under GST, it sought to provide a much wider coverage as compared to the earlier Excise and Service Tax Regime, in order to provide an early resolution of the potential tax dispute coming from the trade and industry. For the first time in any Tax Legislation, an appeal mechanism was provided against the orders passed by the Advance Ruling Authority which was absent under the earlier laws and also under the existing Income Tax Act.

This welcome step by the Govt was met with overwhelming support from the trade and industry and as a result, thousands of applications were filed before the Advance Ruling Authority seeking clarification on a variety of tax issues. Surprisingly, the Advance Ruling Authorities of various states had not only come up with contradictory rulings on the same subject but also most of the rulings were decided in favour of the revenue only. Further, the applicants rarely got any relief before the Appellate Authority of Advance Ruling as well.

Probably, the constitution of this forum, which consists only of revenue officers and not having an independent judicial member is one of the biggest reasons for this outcome. Hence, instead of getting relief, the trade and industry started facing this unique challenge.

This situation was further worsened by the recent order passed by the Bombay High Court in the case of JSW Energy Limited wherein it has been held that no appeal can be filed against an order of the Appellate Authority of Advance Rulings on “merits” since no appeal has been provided under the GST Act. Without going into the merit of this judgment, which seems to have ignored the well-settled proposition of law that a writ petition is indeed maintainable before the High Court, the order of the High Court has certainly created chaos in the Industry.

Seeing this trend, strong perception in the Trade and Industry is getting build as to why one should even approach the Advance Ruling Authority who is likely to decide the matter against the assessee and when practically there is no appeal mechanism against the said order. Whereas if the assessee opts the route of the adjudication, the doors of the tribunal as well as the courts would always be open to seek relief. Given this, it appears that the whole objective of creating this forum to provide speedy resolution of issues, instead of going through the long-drawn litigation route, is getting defeated.

Hence, it was a genuine wish and demand of the industry that the Government should bring some reform in the structure and give life to this forum. Appreciating the need of the industry, the newly elected government in this Budget tried to address this issue by introducing the National Appellate Tribunal for Advance Ruling (NATAR) under Section 101A of the CGST Act, 2017. The proposed NATAR will be presided upon by a retired Judge of the Supreme Court or any High Court and would be accompanied by two technical members representing both the central and the state government.

The composition of the NATAR appears to solve the issue of departmental bias, by introducing a judicial member and also introducing an option of appeal against orders of the Appellate Authority which was previously absent under the GST Laws. However, the wording of proposed Section 101B of CGST Act suggests that an appeal before NATAR would lie only in cases where the views taken either by the members of Appellate Authority of Advance Ruling constituted in the same state or in different states are contradictory.

Though this new proposal by the Government seems to provide relief in some aspects i.e. when there are contradictory views from either of the members of the same Bench or amongst the co-ordinate Benches of different states. However, there is no relief provided against the order of the AAAR if the ruling goes against the assessee. Therefore, the NATAR would have a limited utility and this brings the taxpayer back to square one.

As per the trend of the Advance Authority Rulings thus far, it has been seen that two co-ordinate benches of the Appellate Authority rarely differ in their views when it comes to a single issue. Similarly, a situation wherein the members of the same bench of the Appellate Authority (who are both departmental officers) differ in their opinions, is also rare. Therefore, the NATAR will be limited to addressing rare situations wherein conflicting views have been taken by two or more Appellate Authorities (of different states) or two members of the same Appellate Authority Bench. Thus, despite the introduction of NATAR, effectively there is still no appellate forum available to the assessee having an adverse order of the AAAR.

This issue will only be solved if the NATAR is given wider powers to adjudicate on “any” order passed by the Appellate Authority. Hence while passing the Bill, the Government should make suitable changes in the Bill to provide the much-anticipated relief to the Industry.

In summation, the introduction of the NATAR by the government only solves the issue of the assessee on the surface. However, the real issue of having an efficacious appellate remedy against the orders of the AAR still eludes the taxpayers.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Business-Today.
National Anti-profiteering Authority gets teeth to probe beyond the scope of DG’s complaint

National Anti-profiteering Authority gets teeth to probe beyond the scope of DG’s complaint

India has handed out more powers to the anti-profiteering watchdog, allowing it to widen a probe against a company to include goods or services not covered in an investigation report.

The government has notified the rule changes, inserting a provision in the goods and services tax rules to allow the National Anti-profiteering Authority, or NAA, to direct the Director General of Anti-Profiteering to further a probe if there is reason to believe that there has been contravention of norms in respect of goods or services not covered in the latter’s report.

The move comes on the heels of GST Council, the apex decision making body for the levy, extending the tenure of the NAA by two years. The Council had also approved imposition of an additional penalty of up to 10% of the profiteered amount if the companies don’t pay up a fine of ?25,000 in 30 days.

In the past, there have been cases where the DGAP had sought to widen an inquiry to other goods or services beyond the scope of a complaint. Tax experts said companies now need to prepare themselves better.


“This new provision now specifically allows the NAA to extend investigation to other products as well… From the industry standpoint, it means that the ambit of antiprofiteering proceedings might increase and hence there have to be adequate controls and documentation in place with respect to all products that a company is dealing in,” said Pratik Jain, national leader, indirect taxes, PwC.

The June 28 notification also empowers NAA to summon any person in relation to an inquiry. This was earlier limited to the DGAP or its officers only.

Further, the DGAP has been allowed to complete an investigation within six months from the date of receipt of reference from the standing committee instead of three months now. The DGAP will get additional time to complete any new investigation handed out by the NAA. The DGAP can continue to apply for a three-month extension from the NAA.

A standing committee can now apply for a one-month extension from the NAA, in addition to the two months allowed for examining a complaint or application. Similarly, the NAA can now issue its order within six months — instead of three months earlier —from date of receipt of report from the DGAP.

India put in place an anti-profiteering system to ringfence consumers from sudden spikes in prices after GST was rolled out in July 2017. Countries that implemented GST had witnessed an increase in inflation soon after doing so. It had studied mechanisms that Malaysia and Australia adopted as part of their GST framework.

The country went in for a three-tier structure to investigate anti-profiteering complaints from consumers. At the initial level are the state screening committees and a national standing committee to examine complaints. These committees refer complaints to the Director General of Safeguards, mandated to conduct a thorough investigation by seeking information from the companies concerned. The third and final level is the NAA, which examines the investigation report and hears the company and the complainant before pronouncing a final decision.

Source: Economice-Times

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

Suppliers beware! GST Commissioners can monitor and sting

Suppliers beware! GST Commissioners can monitor and sting

To strengthen anti-profiteering measures in the country, the National Anti-profiteering Authority (NAA) has proposed a Standard Operating Procedure (SOP) for Central and State GST officers to keep an eye on top 20 suppliers in their jurisdictions, make mock purchases and take other measures.

The Rule 128 of the CGST Rules 2017 prescribes that a complaint can be filed by an interested party or a commissioner or any other person. A commissioner is considered to be the most competent authority to find whether a rate reduction has been passed on or not. The commissioner can also authorise any officer to file an anti-profiteering case. As of now, it is mostly the consumers who file complaints.

At the central level, the CBIC (Central Board of Indirect Taxes & Custom) can issue instructions to its officials. Once approved by the GST Council, the States’ tax administration can issue instructions to GST officials.

According to the draft SOP placed before the GST Council at its meeting on June 21, all commissioners (CGST and SGST) will identify top 20 suppliers under their jurisdiction (manufacturers, distributors and service providers) in respect of which the prices/MRP and availability of Input Tax credit (ITC) are likely to be impacted by changes in tax rate or any additional ITC benefit. “The first B2B (business-to-business) invoices of these suppliers’ value chain, for the relevant period, may be checked, for any prima-facie violation of anti-profiteering provisions,” the draft said.

The Commissioners will collect the data from such suppliers and collect pre-rate-reduction evidences, such as invoices, which could help them establish the facts of the case. For this, an anti-profiteering cell will be desirable which will not just help in collecting data but also in creating awareness. It has also been suggested that commissioners may also ‘cause purchase of any goods or service affected by a rate change.’ The CGST Act 2017 prescribes authorisation for the commissioners to make mock purchases so as to gather invoice for the evidence.

The GST Council has approved two-year extension for NAA, which means it can be functional till November 30, 2021. As on May 1, the authority has passed 65 orders and the hearing in 54 other matters is still on. It is stratified at these levels — the Directorate General of Anti-profiteering (DGAP) in the Central Board of Indirect Taxes and Custom, a Standing Committee, and Screening Committees in every State.

As of now, a total of 170 cases are pending investigation before DGAP, while 130 cases are pending examination in Standing Committee. Nearly 100 cases are before State Screening Committees for their consideration. The current pace of disposal of the cases by the authority is four cases per month.

Source: The-Hindu-Business-Line.

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

GST anti-profiteering body may get fresh lease of life

GST anti-profiteering body may get fresh lease of life

India’s anti-profiteering framework may remain in place for another two years as the country eyes more changes to the goods and services tax (GST) structure. Aimed at protecting consumer interest under GST, it was initially meant to be in place for two years.

Discussions have begun and a decision is expected soon after a new government is in place at the Centre, a senior official aware of the development told ET. At the top of the watchdog framework is the National Anti-profiteering Authority (NAA).

“There is a thinking that the National Anti-profiteering Authority’s tenure be extended,” the official said, adding that there are a number of cases that need to be resolved. Besides, another official said, complaints keep pouring in and need to be decided. Votes in the ongoing general election will be counted on May 23.

Key sectors such as petroleum are still outside GST and more changes are expected in the rate structure, making the NAA’s role critical. GST now has four slabs — 5%, 12%, 18% and 28% — and it’s widely expected that middle two may be merged to reduce complexity.

The NAA has passed orders against several companies following profiteering complaints. These include Hindustan Unilever for profiteering estimated at Rs 535 crore, Domino’s franchisee Jubilant FoodWorks (Rs 41.42 crore), Abbott Healthcare (Rs 96 lakh) and McDonald’s franchisee Hardcastle Restaurants (Rs 7.49 crore).

The authority needs to have clear guidelines on determining profiteering, said Pratik Jain, national leader, indirect taxes, PwC. “It seems likely that the authority will get an extension, not only because of a significant number of pending cases but also in view of possible rate rationalisation and expansion of the GST net in the next year or so,” Jain said.

The system was meant to shield consumers against any sudden spike in prices after GST was rolled out in July 2017 and to ensure that companies passed on savings from lower taxes to buyers.

India Adopted 3-tier Structure
Several countries that implemented GST had faced a spike in inflation soon after doing so. India had looked at the mechanisms that Malaysia and Australia had put in place as part of their GST framework.

The Union Cabinet approved constitution of the NAA on November 16, 2017.

India adopted a three-tier structure for the investigation of anti-profiteering complaints from consumers. At the first level are state-level screening committees and a standing committee at the national level to examine complaints. These committees refer complaints to the director general of safeguards, mandated to conduct a thorough investigation by seeking information from the companies concerned. The third and final level is the National Anti-profiteering Authority that examines the investigation report and hears from the company and the complainant before pronouncing a final decision.

#GST Software #EwayBill Software #GSTReconciliationSoftware

Ease Your GST Return Filing & Invoice with XaTTaX- GST Software

Source: Economic Times
In relief to buyers, realtor told to refund ‘excess’ GST

In relief to buyers, realtor told to refund ‘excess’ GST

In what will signal a relief to home buyers across real estate projects, the National Anti-Profiteering Authority (NAPA) has ordered Puri Constructions to refund “excess” GST collected from the buyers, and dismissed the builder’s plea that the benefit could only be calculated on completion of the project. Several builders have not been passing on the benefit on tax credit on inputs such as cement, steel, paints and sanitary-ware, arguing that it will be done at the time of possession.

NAPA has also held that the withdrawal of a complaint would not stop the directorate general of anti-profiteering from conducting probes as there is no provision in the GST Act to withdraw the complaint once it has been made. “Such rulings, should help homebuyer’s understand that under GST looking at only the rate charged by developer, does not give the complete and clear picture. What is equally important is the benefit accrued to the developer on account of reduction in the taxes paid by him on his purchases. One needs to look at both the GST rate and the input tax credit to understand the overall impact on the price,” said Harpreet Singh, partner at consulting firm KPMG.

The case involved Pallavi Gulati and Abhimanyu Gulati, who had purchased a flat in the Anand Vilas project in Faridabad before GST was launched in July 2017. Puri Constructions argued that the buyer had withdrawn the complaint, which showed that he was satisfied with the explanation given. It contended that, ITC which had been taken into account for computation of the profiteering amount was based on all the credit availed by him, assuming that he would be able to sell all the flats before completion.

VIP distributor rapped for not passing on GST benefits:

The National Anti-Profiteering Authority has asked VTWO Ventures, a distributor of VIP luggage, to deposit the excess GST charged by it as it did not pass on the benefit of a reduction in rates from 28% to 18%.
The agency held that the distributor raised the base price of the product to neutralise the effect of reduction in GST rates. It also said commented that since the entity had issued incorrect invoices, they were also liable for penalty.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Times of india.
Proposal to encourage taxmen to file GST profiteering complaints on anvil

Proposal to encourage taxmen to file GST profiteering complaints on anvil

The GST officials are working out a mechanism to prompt taxmen to initiate profiteering complaints, which could be taken up for further investigation by the Directorate General of Anti-Profiteering.

Currently, only consumers file complaints against businesses for not passing on the benefits of reduction of the rates of Goods and Services Tax (GST) on various products.

Under the standard operating procedure (SoP) being worked out by the GST officials, the Central and state government tax officers will be encouraged to take up suo moto the issue of profiteering by businesses, sources said.

Once the tax officers find that GST benefits have not been passed on to the consumers, they will refer the case for further investigation to the Directorate General of Anti-Profiteering (DGAP).

As per the procedure, the DGAP submits its investigation report to the National Anti-Profiteering Authority (NAA), which decide on the final quantum of profiteering and the monetary penalty.

In 2018, the NAA received 80 investigation reports from the DGAP and issued final orders in 29 cases. Of this, 9 businesses were found to have not passed on benefits of rate cuts of about Rs 559.90 crore to consumers.

So far in 2019, the NAA has passed orders in 3 cases.

Sources said as consumers often are reluctant to file complaints, the GST officials and the NAA are keen to rope in the field formation for filing complaints of profiteering against businesses.

Sources further noted that consumers usually lag the expertise to ascertain whether the GST rate cut benefits have been passed on to them by way of reduction in prices. The tax officials, they said, will be able to find out with greater certainty, whether the tax cut benefits have been passed on to the consumers.

The proposed mechanism will also act as a deterrent for businesses who show reluctance in passing on GST benefits.

The GST has replaced a tangle of local taxes and entry levies. Since its rollout on July 1, 2017, GST Council has reduced tax rates on a host of items.

Of the 1,216 commodities being used at present, broadly 183 are taxed at zero rates, 308 at 5 percent, 178 at 12 percent, 517 at 18 percent and 28 items in the 28 percent slab.

XaTTaX: Your automated E-Way bill compliance is just a click away!

Source: Money Control
Consumers feel restaurants are not passing benefits of GST rate cut benefits: Survey

Consumers feel restaurants are not passing benefits of GST rate cut benefits: Survey

Eating out hasn’t become any cheaper despite a big cut in Goods and Service Tax (GST) rates on restaurant bills more than a year ago, consumers feel.

Little over a fourth of the consumers feel that they are yet to receive the benefit even as the GST Council in November, 2017 slashed tax rate on restaurants to 5 percent (minus the option of availing input tax credit) from 18 percent (with the chance of availing the benefit of input tax credit), a survey said.

According to a survey conducted by LocalCircles, white goods and fast moving consumer goods (FMCG) have shown an improvement in trend in rate reduction benefit being passed, while the trend for restaurants passing these benefits is not encouraging.


There have been five rounds of rate cuts and rationalisation exercise since the rollout of GST from July 1, 2017. Out of this, major rate cuts were implemented in November, 2017, July, 2018, with the last one effective January 1, 2019.

In order to ensure that the benefit of GST rate cut is passed on to the consumer, the Council had approved setting up of a quasi-judicial body National Anti-Profiteering Authority (NAA). However, NAA can only begin investigation based on complaints received.

The survey shows that 51 percent respondents feel restaurants are not passing on the benefit of the GST rate cut on restaurants, as on January, 2019, up from 45 percent in October, 2018.

Only 29 percent of them feel that they have received the benefit of lower tax and number has been constant during polls in October as well as January, signaling there has no change in consumer experience despite the rate cut.



In case of FMCG items such as shampoo, grocery, among others, 44 percent of the consumers say that products have not become cheaper, as of January, 2019. However, there has been an improvement in this trend as during June, and October, 2018, 61 percent and 49 percent buyers felt that these items have not become cheap post rate cut in November 2017.

Similarly, in case of white goods such as home appliances, televisions, among others, 47 percent respondents in October, 2018 felt that they have not received the benefit of the rate cut in July 2018. The number, however, fell to 38 percent in January.

Over 60,000 consumers across India are connected through India’s anti-profiteering community founded by NAA and hosted on LocalCircles. To gauge the consumer pulse on how GST rate reductions are reaching consumers, LocalCircles conducted a three-point poll. Over 23,000 votes from 15,000 consumers was received from across the country.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Money Control
Govt may extend term of GST anti-profiteering watchdog

Govt may extend term of GST anti-profiteering watchdog

The government may extend the term of the National Anti-profiteering Authority (NAA) beyond its original two-year mandate, with policymakers arguing that the watchdog needs to function for a longer period in light of the frequent rate changes in the goods and services tax (GST) and the unfinished task of bringing petroleum products under the new indirect tax regime.

Policy makers believe that the benefit of tax rate cuts on 178 items from 28% to 18% announced last November in one of the biggest rounds of tax rate reductions in the GST regime have not been fully passed on to consumers. This has forced the NAA to step up efforts, which include asking tax officials in the field to make sure businesses make suitable price revisions and pass on tax cut benefits to buyers at the beginning of the supply chain itself, rather than waiting for the end consumer to file complaints.

“NAA was established to address profiteering concerns during the (two-year) GST transition period. It was believed that market competition would ensure that businesses pass on benefits of tax reduction to consumers. But experience so far shows that regulatory force is needed to achieve that goal,” a finance ministry official said on condition of anonymity.

The need for NAA’s continuation beyond two years is also felt because the tax rates have been rationalized several times since GST was rolled out in July 2017.

Finance minister Arun Jaitley has on many occasions signalled that eventually, the 12% and 18% tax rates could converge so that there are fewer tax slabs. This and the possibility of eventual inclusion of five key petroleum products in GST that will unlock large amounts of tax credits, the benefit of which needs to be passed on to consumers, would warrant the continuation of NAA, said the official quoted above.

The two-year term for NAA has been specified only in the anti-profiteering rules rather than in the central or state GST Acts, making an extension of term easier, said another government official on condition of anonymity.

The GST Council’s tax rate revisions were in response to changing consumer patterns, as well as to accommodate populist sentiments ahead of crucial state elections.

On 21 July, the council slashed tax rates on several commodities, including refrigerators, television sets and air conditioners, from 28% to 18%.

Since the roll-out of the tax reform in July 2017, tax rates of 384 goods and 68 services have been cut, leading to a revenue loss of more than ₹70,000 crore to the exchequer.

The eventual aim of the government is to bring down the number of slabs under indirect tax structure from five to three and to do away with the 28% slab or make it as lean as possible.

Over the last 15 months, the GST Council has strived to reduce the number of items in the 28% slab. The share of items in the slab has come down from more than 17% at the time of GST’s rollout to 3% after the last round of rate cuts in July this year.

NAA follows a simple test to judge if benefit of tax cuts are passed on to consumers—comparing the prices of individual items or stock keeping units (SKUs) immediately before the tax cut and the price at which the item is sold after the tax revision. Industry players, however, find it easier to ensure compliance on the total output of the organization rather than on individual items. SKU refers to specific quantity of a particular product sold at a particular price, for example, 500 gram of a particular energy drink. A producer who lowers the price twice the extent the tax cuts warranted on one SKU, say 500 gram pack and none in a 200 gram pack, will still get caught for profiteering even if the company as a whole has passed on the benefit to consumers. That is because, consumers file complaints with respect to specific SKUs.

XaTTaX – World Class Automated eSolution for Return filing and e-Waybill


Sources: Livemint
Suppliers liable to pay penalty for not passing GST rate cut benefits: NAA

Suppliers liable to pay penalty for not passing GST rate cut benefits: NAA

In a first of its kind ruling, the National Anti Profiteering Authority (NAA) Monday ruled that suppliers National Anti Profiteering Authority (NAA)will be liable to pay penalty for not passing the benefits of  GST rate reduction on the sale of goods.

The NAA gave its ruling in a case against Jaipur-based Sharma Trading Company, wherein it was alleged that the supplier had not reduced the price of ‘Vaseline’ in line with the reduction of GST rate and thus indulged in profiteering in contravention of Section 171 of CGST Act.

The application, which was filed by a Departmental Store was examined by Standing Committee on anti profiteering and was referred to Directorate General of Anti Profiteering (DGAP) for detailed investigation.The DGAP found that the quantum of benefit was not passed to the departmental store by the supplier on November 15, 2017 following reduction of GST rate to 18 percent from 28 percent.

Sharma Trading Company, the distributor and stockist of Hindustan Unilever Ltd, had contended that it has purchased from HUL the product on which GST was levied at 28 percent and sold the same to the departmental store. It also contended that profit was made by HUL and not Sharma Trading.

Read More: Companies not passing benefits of GST cut rates to customers, govt plans to hike penalty

The NAA, in its 24-page order, said that Sharma Trading will be liable to pay penalty under section 122 of CGST Act.

As per Section 122 supplier of any goods or services without issue of invoice or incorrect / false invoice is liable to pay “a penalty of Rs 10,000 or an amount equivalent to the tax evaded or the tax not reduced under section 31 or short-deducted or deducted but not paid to the government…, whichever is higher”.

However, before imposing the penalty, the NAA has given a notice to Sharma Trading Company as to why it should not be imposed on the company.

Commenting on the order, AMRG & Associates Partner Rajat Mohan said: “This ruling by NAA has made it clear that anti-profiteering provisions apply to each supplier for its supplies, and in no case burden can be shifted to any other person in the supply chain. This would bring small traders and shopkeepers also under the umbrella of anti-profiteering regulations”.

Ease Your GST Filing & Invoice with XaTTaX GST Software


Source: Live Mint
× How can I help you?