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HC order could dilute Centre’s GST anti-profiteering efforts – News in Headlines
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HC order could dilute Centre’s GST anti-profiteering efforts

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A decision taken by the Delhi High Court recently has the potential to undo the government’s steps to provide the GST Anti-Profiteering Authority with greater powers to ensure no profiteering occurs.

The High Court has provided relief to Reckitt Benckiser India Private Limited by ordering an interim stay on the notice issued by the Director General of Anti-Profiteering (DGAP) seeking information on all products of the company, whereas the National Anti-Profiteering Authority (NAA) had ordered an inquiry for only one product.

Earlier this month, the government had provided the DGAP with precisely this power, to assess products that are currently not part of its investigation.

“It is pointed out by Mr. P. Chidambaram, learned senior counsel for the petitioner, that the National Anti- Profiteering Authority has ordered an inquiry as regards one of the products of the petitioner i.e. Dettol HW Liquid Original 900 ml (complained product).

“The grievance of the petitioner is that the Director General of Anti-Profiteering (DGAP) has by the impugned notice dated 8th/9th April, 2019 sought information on all products of the petitioner,” the order said.

“The court is of the view that the petitioner has made out a prima facie case for grant of limited interim relief.

It is directed that, till the next date, it will not be required to furnish information to the DGAP pursuant to the impugned notice other than information pertaining to the complained product,” the order added.

The court, however, clarified the NAA’s inquiry as far as the complained product is concerned would proceed in accordance with the law.

The government had, in early July, notified the changes in the rules of the NAA that allowed the NAA to direct the DGAP to further a probe, in case there was a reason to believe that there was a contravention in the rules, into goods and services not covered in the DGAP’s report.

“As a matter of practice, anti-profiteering investigations have been extended to products and services of a company, which were not a subject matter of the complaint,” Pratik Jain, partner and leader indirect tax, PwC India said, “This not only means additional paper work, collation of data etc. but also results in delay in completion of the investigation. If this principle [of only looking into the complained product] is finally upheld by courts, it would provide the much needed relief to industry, which has been requesting the government for issuance of definitive guidelines with respect to anti-profiteering proceedings

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Rajveer Sekhawat

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