DNA Money Edit: GST probe agency vital for consumer protection

Investigations by the Goods & Services Tax (GST) anti-profiteering agency against the businesses profiteering are indeed a welcome move. The government feels that some businesses have not been passing on the benefits to consumers. The Direct General of Anti-Profiteering (DGAP) has charged companies such as Procter & Gamble (P&G) and Johnson & Johnson (J&J) with profiteering by denying consumers the benefit of tax-cuts announced by the GST Council. Section 171 of the Central GST Act was introduced in the GST Act to protect consumers. It has made it mandatory for companies to pass on the benefit of any rate reduction and any increase in input tax credits to consumers.

While the anti-profiteering agency has kept the companies on their toes, some businesses have contended that the absence of a clearly-defined method to calculate the undue profit earned has led to the ambiguity. Several decisions of the NAA have been questioned in various high courts. A few months ago, the National Anti- Profiteering Agency (NAA) held India's biggest FMCG firm Hindustan Unilever (HUL) guilty of not passing on the tax-cut benefits to consumers and profiteering Rs 383 crore from it. Delhi High Court has stayed the NAA order which was challenged by the company.

Ambiguity in dealing with anti-profiteering measures has become a bone of contention between the companies and the anti-profiteering authorities. It is important to rectify the ambiguity as quickly as possible.