Anti Profiteeing Clause


Section 171 of CGST Act provides that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

To check the above compliance, Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing

Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

For eg. A person was selling goods earlier for Rs 200 where rate of VAT was 12.5%. The rate of tax in GST on such item has been reduced to 5%. In such case, the person need to sell the goods on price not more than Rs. 186.67


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