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Industry experts have welcomed the Central Board of Indirect Taxes & Customs (CBIC) notifications that overhaul the anti-profiteering framework under the Goods and Services Tax (GST) regime but have also raised concerns regarding the potential protraction of pending litigations and the need to ensure consumer protection in a newly deregulated pricing environment.
They said the restoration of oversight will enhance decision-making and compliance, highlighting that the initial purpose of anti-profiteering provisions—to ensure that reduced tax benefits reach consumers—has become less relevant as market conditions stabilise. The introduction of a sunset clause is viewed as a significant relief for businesses, allowing them to navigate pricing more freely. However, there are worries about the implications of deregulation on consumer interests.
Overview of the new notifications
The CBIC has issued two key notifications that will reshape the compliance landscape. Notification No. 19/2024 establishes a definitive cutoff date of April 1, 2025, after which no new applications for anti-profiteering investigations will be accepted. According to experts, this landmark decision allows businesses to set prices without the constraints of anti-profiteering regulations, ushering in a more dynamic pricing environment.
Simultaneously, Notification No. 18/2024 empowers the Principal Bench of the GST Appellate Tribunal (GSTAT) to adjudicate ongoing anti-profiteering cases, shifting the responsibility from the Competition Commission of India (CCI). This move aims to restore specialized tax law expertise to the adjudication process, addressing challenges that the CCI faced in managing these cases.
Experts believe that as the GST landscape evolves, these changes are set to foster a more equitable and competitive market environment, paving the way for growth and innovation in the years to come. The new directives reflect the government’s commitment to simplifying compliance while ensuring that the interests of consumers remain protected. However, careful monitoring of both the implementation and the potential impacts on pricing dynamics will be crucial moving forward.
Landmark move
Rajat Mohan, Executive Director at MOORE Singhi, said, “These enhancements will lead to more informed and precise decisions in addressing profiteering concerns. The government’s restoration of oversight over profiteering matters brings much-needed tax law expertise back into the fold.”
This move is crucial for maintaining a balanced marketplace where businesses can operate effectively while ensuring consumer rights are upheldRajat Mohan, Executive Director at MOORE Singhi
Parag Mehta, a partner at N.A. Shah Associates LLP,
concurred, noting, “With GST rates and other factors getting stabilised, there is a strong view that anti-profiteering provisions are no longer required. Hence, CBIC has brought a sunset clause for the same. This is a very welcome move, and hopefully, the trade will also pass the benefits wherever applicable.”
This transition marks a maturation of the GST framework, aligning it more closely with current market realitiesParag Mehta, a partner at N.A. Shah Associates LLP
Abhishek Jain, Indirect Tax Head at KPMG, d
escribed the introduction of a sunset clause as “a welcome and long-awaited change for the industry,” emphasizing its importance in allowing businesses to operate normally within a competitive economy.
The sunset clause is essential for allowing businesses to manage pricing details without excessive regulation, however the effectiveness of this transition will depend on ongoing regulatory vigilance to protect consumer interestsAbhishek Jain, Indirect Tax Head, KPMG
Prateek Bansal, Tax Partner at White and Brief – Advocates & Solicitors,
stressed the need for these reforms, saying, “Businesses shall now be free to decide the prices of their goods and services according to market forces. This change provides much-needed relief from ongoing scrutiny.”
Transparency is essential during this transition to guarantee that consumers fully benefit from the advantages intended by the GST frameworkPrateek Bansal, Tax Partner at White and Brief – Advocates & Solicitors,
Expert concerns
Despite the positive feedback, several concerns have been raised regarding the new framework. Parag Mehta said while the sunset clause is a step forward, “the issue is that pending litigations for anti-profiteering will get elongated as the visibility for the functioning of the GST Appellate Tribunal (GSTAT) is still a question mark.” This raises concerns about the efficiency and timeliness of investigations, potentially leading to prolonged uncertainty for businesses.’
Additionally, experts are wary of the implications for consumers. Abhishek Jain stressed on the need for careful monitoring, stating, “It’s essential to ensure that the transition does not compromise consumer interests.” Without stringent oversight, there is concern that consumers might not fully benefit from potential price reductions.
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