Context:
Recently, in setback to HUL, Nestle, Reckitt Benckiser et al, Delhi HC upholds anti-profiteering provisions under GST law.
Anti – Profiteering provisions (Section 171 of CGST Act):
- Rules prevent entities from making excessive profits due to the GST.
- Any reduction in the rate of tax on supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of a commensurate reduction in prices.
- The central government would set up an 5-member authority to check whether input tax credits availed by the beneficiaries.
- Authority is free to decide the methodology regarding the rate of tax , supply of goods etc.
- Authority also has the power to impose a penalty, order a reduction in final prices and cancel the registration of any person or entity that indulges in ‘profiteering’.
Court’s Reasoning on Section 171 of CGST Act:
- Mandates tax forgone has to be passed on as a commensurate reduction in prices
- Falls within law making power of Parliament
- Lays out a clear legislative policy does not delegate any essential legislative function
- Not a price fixing mechanism
- No fixed/uniform method or mathematical formula can be laid down for determining profiteering
- A statutory provision cannot be struck down on the possibility of abuse
National Anti-profiteering Authority (NAA):
- Statutory body
- Constituted under Goods and Services Tax (GST) Act, 2017.
- Aim – ensure that the reduction in rate of tax or the benefit of input tax credit is passed on to the recipient by way of commensurate reduction in prices.
- The orders of the NAA can be appealed against only in the high court.
- In 45th GST council meeting – decided to explore possibility of transferring all cases to Competition Commission of India (CCI).
Competition Commission of India (CCI):
- Statutory body
- Constituted under Goods and Services Tax (GST) Act, 2017.
- Aim – ensure that the reduction in rate of tax or the benefit of input tax credit is passed on to the recipient
- Responsible for enforcing the Competition Act, 2002
- Composition – Chairperson and 6 Members – appointed by the Central Government.
- Quasi-judicial body – gives opinions to statutory authorities and also deals with other cases.
Source: The Hindu
Previous Year Question
In India, Legal Services Authorities provide free legal services to which of the following types of citizens?
1. A person with an annual income of less than Rs.1,00,000
2. Transgender with an annual income of less than Rs. 2,00,000
3. Member of Other Backward Classes (OBC) with an annual income of less than Rs. 3,00,000
4. All Senior Citizens
Select the correct answer using the code given below:
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 and 2 only
(b) 3 and 4 only
(c) 2 and 3 only
(d)1 and 4 only
Answer: (a)
Explanation:
Statement 3 is not correct:
There is no such provision of free legal aid specifically for OBC.
Statement 4 is not correct:
The free Legal Aid is not available for free for all senior citizens.
