Suppliers beware! GST Commissioners can monitor and sting


A commissioner is considered to be the most competent authority to find whether a rate reduction has been passed on or not

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.

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