The Delhi High Court will hear more than 50 petitions challenging the constitutional validity of anti-profiteering regulations in absence of any methodology to calculate profiteering under the Goods and Services Tax (GST) law.
The companies that dragged the indirect-tax department to court over anti-profiteering provisions under GST included Hindustan Unilever, Jubilant Foodworks, Abbott, Nestle, Whirlpool, IFB, Johnson & Johnson (J&J), etc.
The court would also look at the legality and interpretation of Section 171 CGST Act.
As per Section 171 of the CGST Act 2017, suppliers of goods and services should pass the benefit of any reduction in the rate of tax or the benefit of input tax credit to the recipients by way of commensurate reduction in prices.
The petitioners have raised multiple issues related to the anti-profiteering. In an earlier hearing, the High Court had asked the lawyers of the petitioners to arrive at a consensus on the issues to be heard by the court. However, the petitioners could not arrive at a consensus and their lawyers submitted that there are around 48 issues that need resolution by the court.
It is said that there are tremendous ramifications be it the methodology or procedure being used by the NAA, which does not have an economic basis. The court will also look into, apart from other rules, the legality of powers given to the National Anti-profiteering Authority to determine the methodology and procedure for a determination as to whether the reduction in the rate of tax on the supply of goods or services or the benefit of the input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices.
