National Anti-Profiteering Authority (NAA)

National Anti-profiteering Authority

  • National Anti-profiteering Authority was constituted by the central government to provide an institutional mechanism under the GST law for checking the unfair profit-making activities by the trading community.
  • The NAA is tasked with ensuring full benefits of reduction in tax on supply of goods or services flow to consumers.


NAA will be headed by senior officer of level of a Secretary to Union Government and shall have four technical members from Centre and/or States. The chairman and four members will be less than 62 years of age.

Powers and functions

  • If NAA finds that company has not passed on benefits of tax reduction, it can direct entity to pass on benefits to consumers along with interest from the date of collection of the higher amount till date of return of such amount.
  • If the beneficiary cannot be identified, NAA can ask company to transfer amount to the ‘Consumer Welfare Fund’, as provided under Section 57 of CGST Act.
  • In extreme cases NAA can impose a penalty on defaulting business entity and even order cancellation of its registration under GST.
  • NAA also has power to cancel registration of any entity or business if it fails to pass on benefit of lower taxes under GST regime to consumers, and empowers consumers to approach it in case of any complaint.

GST consumer welfare funds

The GST law also provides for the creation of a Consumer Welfare Fund wherein undue benefits made by businesses under the GST law have to be deposited, in case it cannot be passed on to the identified recipient. The proceeds from the GST consumer welfare fund can be given as grant to the Centre and state governments as well as regulatory authorities.

Why the profiteering is rampant in India?

According to the anti-profiteering laws in India, businesses have to pass on the benefit of tax cuts as well as tax rebates to consumers. But the businesses often increase prices to commensurate with the reduced taxes due to the free nature of the market.

Also, there are no explicit guidelines for companies which they are required to follow so that the benefit of tax rebates and rate reductions on raw materials are passed on to consumers at the right measure across all final products. As a result, the NAA is witnessing a large number of complaints related to overcharging.

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