Notification No. 18 & 19 of 2024 (Central Tax)
In a recent update, the Central Government, vide Notification 18/2024-CT, has taken a significant step by empowering the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) to ensure that businesses pass on the benefits of input tax credits (ITC) and tax rate reductions to consumers. This development follows the release of the said Notification No. 18/2024-CT by the Central Board of Indirect Taxes and Customs (CBIC) on September 30, 2024.
As per this notification, effective from October 1, 2024, the Principal Bench of GSTAT will have the authority to scrutinize whether any registered business that avails ITC or benefits from tax rate reductions has transferred those savings to their consumers in the form of lower prices on goods or services.
Starting from October 1, all unresolved complaints related to the anti-profiteering provisions will be addressed by the Principal Bench of the GST Appellate Tribunal (GSTAT) instead of being handled by the Competition Commission of India (CCI).
Furthermore, Notification No. 19/2024-CT, also issued by the CBIC on September 30, 2024, states that starting from April 1, 2025, the authority will no longer accept requests for examination of whether a business has passed on the benefits of ITC or tax rate reductions. This notification becomes effective from the date it is published in the Official Gazette.
As per the Notification, starting from April 1, 2025, consumers will no longer be able to file complaints against companies for not passing on the benefits of GST rate reductions to end customers. However, any complaints submitted before this date will continue to be handled by the Principal Bench of the GST Appellate Tribunal (GSTAT) until a final resolution is achieved.
Key Provisions Under Section 171 of the CGST Act, 2017:
- Passing on Benefits: Any reduction in the tax rate on goods or services, or the benefit of ITC, must result in a corresponding reduction in prices, which is to be passed on to the customer.
- Government Authority: The Central Government, based on the recommendations of the GST Council, can establish or empower an existing authority to examine whether businesses have passed on these benefits.
- Examination Process: If it is found that a business has not reduced its prices as required, the concerned authority can impose a penalty.
Penalties for Profiteering
If a registered person is found guilty of profiteering—which means not passing on the benefits of tax reductions or ITC—there is a penalty equivalent to 10% of the profiteered amount. However, if the profiteered amount is paid within 30 days of the order, the penalty will not apply.
This new development highlights the government’s focus on ensuring transparency and fairness in pricing, ensuring that consumers receive the benefits intended by the GST framework. Businesses must now be diligent in reflecting tax benefits in their pricing strategies to avoid penalties.
To Access the Notification No. 18/2024-Central tax Click Here
To Access the Notification No. 19/2024-Central tax Click Here
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