HomeBUSINESSProbe wings of NAA, CCI to be merged

Probe wings of NAA, CCI to be merged


NEW DELHI : The Union government plans to merge the investigation wings of the National Anti-profiteering Authority (NAA) and Competition Commission of India (CCI) to deal with goods and services tax-related offences.

The move follows the Centre’s decision to subsume the GST anti-profiteering watchdog with the CCI. The NAA’s terms ends in November.

About 150 cases are pending with the NAA. The move is being seen as the start of the phasing out process of the profiteering legislation.

The NAA issued 26 orders in July and is expected to give orders for 40-50 more by November. Around 100-odd cases will be transferred to the CCI.

From November, the office of the Director General of Investigation attached to CCI will investigate such cases.

CCI regulates the behaviour of businesses and traders and monitors conduct that may stifle competition by way of anti-competitive agreements or the abuse of dominance.

The NAA has investigated cases across industries including cement, steel, tyre, shipping and digital economy, and has evolved the economic analysis tools.

“We are on course to subsume the NAA within the CCI by the end of the year…the DGAP investigation wing will move to CCI, but orders will be passed by the CCI board… now the rates do not change very often, unlike in the initial years of the introduction,” said a senior government official.

The NAA was set up for two years till November 2019 to ensure any reduction in tax rates on any supply of goods or services or benefit of the input tax credit is passed on to the recipients via adequate reduction in prices.

Abhishek Jain, partner, Indirect Tax, KPMG in India, said it was noteworthy that this change in the governing body will not affect the challenge posed towards constitutional validity of the anti-profiteering provisions, which are under challenge in various high courts for being in violation of the Constitution.

“Whether this merger would mean no new anti- profiteering notices being issued by the government, is something yet to be seen,” he added.

Nearly all anti-profiteering rules have been challenged via 126 writ petitions filed by suppliers against the NAA’s orders across eight high courts.

“While the pricing of goods and services should ideally be decided by market forces and not by regulations. If there’s a need to extend the tenure of the anti-profiteering authority, unification with the CCI accompanied by a clear methodology to decide matters will be beneficial for businesses,“ said M.S. Mani, partner, Deloitte India.

A finance ministry spokesperson didn’t respond to emailed queries till press time.

The winding up of the NAA after five years also suggests that the Centre wants market forces to play a role in the transmission of tax benefits to consumers, while complaints will be handled by the CCI.

The structure of the anti-profiteering ecosystem is considered to have some flaws.

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