What is Anti-Profiteering under GST regime?


Though Goods and Services Tax (GST) rolled out in July 2017, a person in the street are still trying to figure out its complexities. Since Government has actively started considering slash in the GST rates of several items; it is somehow conventional to understand as to what exactly anti-profiteering is under GST.

Q. What is anti-profiteering under GST regime?

A. If there is a reduction in GST rate or benefit of input tax credit, it should not be solely retained by the business and must be passed on to the end customer.

Under the provisions of anti-profiteering, it is illegal for a business not to pass on the benefits of GST rate to end customer and thereby indulging in illegal profiteering.

The government has created a regulatory authority i.e. National Anti-Profiteering Authority who works to find taxable registered persons who indulge in illegal profiteering and also to take action against.

Reporting to Anti-profiteering Authority

Any person who believes that a taxable person is engaged in illegal profiteering from GST and has information to prove, he can refer to the local screening committee. The case will be then examined by a State level Screening Committee constituted by the State Governments consisting of officers of the State Government.

If the screening committee is convinced with the information provided, it would be forwarded to the Standing Committee on Anti-Profiteering. The Standing Committee consists of Officers of both the State Government and Central Government.

If the Standing Committee is satisfied that there is evidence to show that the taxable person has engaged in illegal profiteering, then the matter will be referred to the Director General of Safeguards for a detailed investigation.

This process is then followed by Investigation which is done by Director General of Safeguards. The role of Director General of Safeguards is to collect evidence, conduct investigation and issue notices to the interested parties.

Once all the procedure for information and hearings are complete, the Director General of Safeguards will provide a report of findings. Report of findings must be submitted by the Director General of Safeguards normally within 3 months or 6 months if an extension is provided.

An order under Anti-Profiteering:

The order from the committee may validate:

  1. Reduction in prices.
  2. Returning an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest to the recipient.
  3. Imposition of penalty as specified under the Act.
  4. Cancellation of GST registration.


Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.

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