Section 171 of CGST Act 2017: Anti Profiteering Measure

Provisions under Section 171 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Anti Profiteering Measure”, are as under:

Section 171 of CGST Act 2017: Anti Profiteering Measure (CHAPTER XXI – MISCELLANEOUS)

(1) 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.

(2) The 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.

(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

(3A) Where the Authority referred to in sub-section (2), after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered:

Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority.

Explanation.— For the purposes of this section, the expression “profiteered” shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both.

Amendments History:

1. CBEC notifies 1st July 2017 as the Commencement date for Section 171 of the CGST Act 2017, vide Notification 9/2017 Central Tax.

2. Sub-section (3A) inserted vide Finance (No. 2) Act 2019. However, appointed date for this amendment is yet to be notified by the CBIC/ Govt.

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Govt. has notified the CGST Act, 2017 on 12th April, 2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance (No. 2) Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020. Further, CBEC/ CBIC has also issued various Notifications from time to time, relating to the commencement date of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required.

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  1. Prakhar
  2. Ratish Nair

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