Section 171 of CGST Act

Antiprofiteering measure

(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,(updated by Notification No. 23/2022 of Central Tax) 

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.

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CA Rahul Gupta

+91-80535-55086