Anti-business body NAA gets 2-yr extension

Nothing is so permanent as a temporary government programme, said the legendary economist Milton Friedman. He could have added government body. The National Anti-profiteering Authority (NAA) is such. The NAA, as per the original charter, should have ended on November 30. The Goods & Services Tax (GST) Council, however, has given it another lease of life, for two years; now it will make its obnoxious presence felt till November 30, 2021.

Obnoxious, because the NAA’s very existence militates against the spirit of liberalization. The entire NAA mechanism is an exercise in price control, a practice that is the antithesis of market economy. The GST Act said, “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.” Otherwise, the NAA would penalize enterprises; they could even be shut down.

Worse, the GST Council has also imposed an additional payment in the event of the ‘profiteered’ amount not being deposited within a month. If a company fails deposit the profiteered amount within 30 days, it will be liable to pay 10 per cent of that amount. As per the present rule, the penalty is just Rs 25,000.

As it is, the NAA has been a bane of India Inc. By May 1, it has imposed penalties of over Rs 600 crore in it 65 orders.

The meeting, chaired by Finance Minister Nirmala Sitharaman, was the first after the swearing-in of the Narendra Modi government.

The Council also permitted Aadhaar to be used for new registration. The deadline for filing annual return has been extended by two more months.

“The Council also decided to introduce electronic invoicing system in a phase-wise manner for B2B [business-to-business] transactions,” an official press release said. E-invoicing is a rapidly expanding technology which would help taxpayers in backward integration and automation of tax relevant processes. It would also help tax authorities in combating the menace of tax evasion. The Phase 1 is proposed to be voluntary and it shall be rolled out from January 2020, the release added.

On issues relating to GST concessions on electric vehicle, charger and hiring of electric vehicle, the Council recommended that the issue be examined in detail by the Fitment Committee and brought before the Council in the next meeting.

The Council directed that the issue related to valuation of goods and services in a solar power generating system and wind turbine be placed before next Fitment Committee. The recommendations of the Fitment Committee would be placed before the next GST Council meeting, the release said.