The GST Council extended the term of the National Anti-profiteering Authority (NAA) by two years recently.
Considering the number of pending cases and increasing tussle between NAA and numerous companies, this move was largely anticipated.
Tax experts point out that only an extension of NAA’s term, without proper guidelines, doesn’t serve much purpose.
There are several factors that determine movement in prices including the cost of raw materials and the level of competition.
Companies may find it difficult to cut prices on the basis of GST rate cut alone, without accounting for the impact of other factors.
Also, one cannot ignore the amount of time and money companies may have to employ to deal with cases of price investigations, which are complex especially for service providers.
So, some tax experts are of the view that companies cannot be expected to operate in an environment of controlled pricing forever and that there should be a specific duration for this clause.