The National Anti-Profiteering Authority was set up to ensure that the benefits of GST rate cut are passed on to the customers in the form of reduction in prices by various businesses. But what is this authority and what has it done so far? Inan order passed on 12 March 2020, The National Anti-Profiteering Authority has directedPatanjali Ayurveda Ltd. to pay up Rs.75.08 crores for not passing the benefitof reduced Goods & Services Tax (GST) rates to its customers. As per thisorder, the company is required to deposit the amount along with 18% GST intothe consumer welfare funds of the Centre & States, within a period of threemonths. So,what is the purpose of National Anti-Profiteering Authority (NAA) and what is theirjurisdiction? Here is a detailed explainer. We also look at few prominentorders issued by the NAA. NAA constituted to ensure GST benefits are passed onto customers TheNAA was established under Section 171 of the Central Goods and Services Tax Act, 2017. As per the provisions, any reduction of GSTrates or the benefit of input tax credit needs to be passed on to the customersin the form of reduction in prices. The wilful action of not passing the benefits to the recipients isconsidered as profiteering. Theidea of setting up NAA, is to oversee and ensure that the registered personstransfer the benefits to the final recipients. On 16 November, 2017, the Union Cabinet has approved the creation of the posts of Chairman & Technical members of NAA under GST. This was done in the backdrop of the reduction in the GST rates across multiple items in November, post the introduction of GST in July’2017. Fromthe midnight of 14 November 2017, the GST rates of around 178 items werereduced from 28% to 18%. Many other goods had the rates reduced from 18% to12%, while few others were completely exempted. The NAA was thus constituted toensure that the consumers benefit from this sharp fall in GST rates. NAA is authorized to take action against the violators TheNational Anti-Profiteering Authority (NAA) comprises of a five-membercommittee. This includes a Chairman and four technical Members. As per Rule 137, of CGST Rules, 2017 – Anti Profiteering Authority ceases to exist after a period of two years, unless recommended otherwise by GST council. However, the tenure of NAA was extended by GST council by two more years in its meeting on 21 June, 2019. Thecomplaints by consumers can be registered online via NAA’s portal. Theredressal process of complaints is based on jurisdiction. Those that are localin nature are first sent to a State-level committee for screening, while theones at national level are sent directly to the Standing committee. An instanceof profiteering that relates to an item of mass consumption which hasramifications across the country are also sent directly to the Standingcommittee. Basedon the merit of the complaint, the respective committees will refer the casefor further investigation to ‘Directorate General of Safeguards’, who conductthe investigation and submit the report with NAA. In case NAA finds that thecompany has not passed on the GST benefits, it would be directed to within astipulated timeline to either: So far, a total of 125 orders issued by NAA Asper the list of orders provided on NAA Portal, there are a total of 125 orders from the time it wasconstituted. In the current year i.e. 2020, 16 orders were issued including therecent one regarding Patanjali Ayurveda ltd. In 2018, 29 orders were issued whilein 2019, a total of 80 orders were issued. Responding to a question in Lok Sabha on 02 July 2019, the Minister ofFinance, has stated that as on 20 June 2019, a total of 67 orders were passed by NAA. This figure tallies with the list oforders provided on NAA portal, as on that date. Further,the Minister also stated that out of these 67 cases as on 20June2019, 26 cases were confirmed as instances of profiteering by businesses, withthe profiteering amounting to Rs. 600.51 crores. As on date, further 58 orderswere issued, after the response in Lok Sabha. Asper a response given by Minister of Finance on 22December2017, a total of 70 complaints were received by NAA. Whereasin 2018, 360 complaints were received by NAA, as per the information provided in Lok Sabha on 08 January 2019. There is no information available onthe number of complaints received in 2019 and 2020. Some of the prominent orders issued by NAA: NAA fines Hindustan Unilever for 223 crores for profiteering Inone of its first high profile orders, NAA found India’s largest FMCG company,Hindustan Uniliver (HUL) guilty of profiteering from the revision in GST ratesand not transferring the benefits to the consumers. As per the order issued on 24 December 2018, HUL is alleged to have profiteered to an extent of Rs.