• Notification Date: 15-02-2024
• Notification No: N/A

Supreme Court issues Notice to Centre regarding GST Anti-profiteering Provision

The Supreme Court on Monday issued a notice to the government on an appeal against the Delhi HC’s January 29 judgment that upheld the constitutional validity of the provisions related to anti-profiteering under the Central Goods and Services Tax Act and the establishment of National Anti-Profiteering Authority (NAA). 
 
The anti-profiteering provisions under the GST law makes it is mandatory for suppliers of goods and services to pass on the benefit of any reduction in the rate of tax, or the benefit of input tax credit, to recipients by way of commensurate reduction in prices. 

A Bench led by Chief Justice DY Chandrachud issued notice to the Finance ministry, the National Anti-profiteering Authority, its Director General, the Central Board of Indirect Taxes and Customs, and the GST Council on an appeal by Excel Rasayan alleging that the provisions are "manifestly arbitrary and violative of Article 14 of the Constitution of India" as they do not provide any methodology or objective parameters for computation of profiteering. The provisions do not define "commensurate benefit," which is imperative for determining profiteering, said the petitioner. 

Counsel Abhishek A Rastogi argued that the provisions amount to delegation of essential legislative function from Parliament to the Executive and amounts to sub-delegation of delegated powers from the Executive to the National Anti-Profiteering Authority. The provisions are beyond the law-making power of Parliament under Article 246A of the Constitution, he added. 

Over 100 companies, including Hindustan Unilever, Patanjali, Jubilant Foodworks, Reckitt Benckiser, Phillips, Gillette India, Procter and Gamble Home Products, and several others, had moved the HC against the anti-profiteering provisions. The HC upheld the law on the grounds that it “eliminates the levy of multiple taxes, avoids any cascading tax effect, streamlines the credit mechanism by weeding out distortions in the supply chains and ensures a smooth pass-through and transparent mechanism for levying tax.”