CBIC CIRCULAR:CBIC Empowers Principal Bench of GST Appellate Tribunal to Hear Anti-Profiteering Cases
The Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 18/2024 – Central Tax on 30th September 2024, setting a significant milestone in Goods and Services Tax (GST) governance. The notification officially empowers the Principal Bench of the GST Appellate Tribunal to handle cases related to anti-profiteering under the GST regime. This move is expected to tighten compliance mechanisms around pricing and tax benefits under GST, ensuring that the benefits of tax reductions and input tax credits are passed on to consumers.
Highlights of the Notification
1. Authority of the Principal Bench: As per the notification, the Principal Bench of the Appellate Tribunal, which is constituted under sub-section (3) of section 109 of the Central Goods and Services Tax Act, 2017 (CGST Act), is now empowered to examine whether input tax credits availed by any registered person or a reduction in the tax rate has resulted in a corresponding reduction in the price of goods or services supplied by that person. This aspect is critical in enforcing anti-profiteering measures.
2. Implementation Date: The notification will come into effect starting from 1st October 2024. The timing aligns with the government’s ongoing efforts to streamline GST adjudication and improve the transparency of the tax system.
3. Implication for Businesses: Businesses will now face closer scrutiny regarding their pricing structures in light of input tax credits and tax rate reductions. This Tribunal Bench will play a pivotal role in determining if businesses have adjusted their prices in accordance with the benefits they receive from the GST regime.
4. Legal Foundation: The notification was issued under the powers conferred by sub-section (2) of section 171 of the CGST Act, 2017, and sub-section (1) and the second proviso to sub-section (5) of section 109 of the same Act. These provisions specifically deal with anti-profiteering measures and the role of the Appellate Tribunal in addressing disputes.
5. Consumer Benefits: The primary aim of these provisions is to ensure that consumers benefit from any reduction in tax rates or from input tax credits. With the Tribunal now empowered to hear these cases, there will be more clarity and quicker resolution on whether businesses are unjustly pocketing these tax benefits without reducing prices for consumers.
This notification is a significant step forward in empowering consumers and holding businesses accountable under the GST framework. It reinforces the government’s commitment to ensuring fair trade practices by ensuring that the benefits of GST are properly passed down the supply chain to the end consumer.
Conclusion
The empowerment of the Principal Bench of the GST Appellate Tribunal marks an important evolution in the GST adjudication process. With a dedicated focus on anti-profiteering, this development enhances consumer protection and ensures that the economic benefits of the GST framework, such as input tax credits and reduced tax rates, are not unduly retained by businesses. Effective from 1st October 2024, this measure strengthens the accountability and transparency of businesses under the GST regime
