Relevance: GS- 3 Indian Economy

Why in News?

• The GST Council decided to extend the tenure of the National Anti-Profiteering Authority (NAA) for one more year.
• This is a second extension for the Authority whose term will now continue till November 30, 2022.

Issue with NAA:

• FICCI urged for the repeal of the GST law's anti-profiteering clauses, allowing market forces to determine the prices of products and services.
• Working of NAA has resulted in arbitrariness and contradictions, as various standards and indexes have been applied inconsistently from case to case.
• Due to lack of quorum, NAA could not dispose any case in April-June quarter, leading to rising pendencies.
• There is no provision for filing appeal to NAA orders to an appellate authority such as the Goods and Services Tax Appellate Tribunal.
• In terms of anti-profiteering, obtaining relief from an NAA order currently entails petitioning a writ court pursuant to Article 226 of the Constitution and requesting the court's writ jurisdiction.
• Nearly all the Anti-Profiteering rules framed under law have been challenged through 126 writ petitions filed by suppliers against NAA’s orders in eight High Courts.
• Additionally, the law contains numerous other fundamental flaws, such as a lack of definitions for the term "commensurate reduction" as used in Section 171 of the Act. It is uncertain whether this reduction must be absolute or can include a reduction within a range that functions as an acceptable de-minimis range.

Way Forward:

• NAA should clearly lay down guidance and standard operating procedures for calculation and apportionment of the commensurate benefit for each sector or industry.
• The GST Council has mandated the Tax Department to explore the possibility of transferring pending and future cases to the Competition Commission of India post-November 2022.

Sources:

• livemint
• PIB