As India prepares for a major GST 2.0 overhaul, several opposition states have demanded the introduction of anti-profiteering mechanisms amid concerns that companies may pocket tax benefits instead of passing them on to consumers.
At a recent GST meeting, states such as Kerala, West Bengal, and Tamil Nadu sought a stronger deterrent framework. “There have been instances in the past where the benefits of rate cuts haven’t been passed to the consumers,” said K N Balagopal, Kerala’s Finance Minister.
The debate has revived discussions around the now-defunct National Anti-Profiteering Authority (NAA), which was introduced in 2017 under Section 171 of the CGST Act. Its mandate was to ensure that businesses reflected GST rate cuts and input tax credit (ITC) benefits in retail prices. However, the NAA was discontinued due to criticism for delayed investigations and an unclear methodology for quantifying profiteering.
“The earlier framework under the National Anti-Profiteering Authority (NAA) was criticised for its protracted investigations, lack of clarity in methodology, and the perception of being more punitive than corrective. However, the principle behind such a mechanism—ensuring that tax reductions and input tax credits actually benefit end consumers—remains sound and relevant,” an tax expert said.
Cases of non-compliance were frequent. Several consumer goods majors — including Hindustan Unilever, Jubilant Foodworks, Patanjali, Reckitt Benckiser, and Procter & Gamble — faced action. The latest case was closed in August 2025, when Subway franchisee Urban Essence was found guilty of profiteering ₹5.47 lakh by withholding tax-cut benefits.
After late 2022, anti-profiteering cases were handed over to the Competition Commission of India (CCI). But in mid-2024, CCI backed out, saying that “anti-profiteering was not its core function,” transferring adjudication to the GST Appellate Tribunal. With the sunset clause ending new complaints from April 2025, experts warn that weak enforcement risks emboldening businesses.
“With the NAA replaced by the GST Appellate Tribunal, industry hopes for a more pragmatic adjudication. The government may not return to strict price control, but will certainly want tax benefits to reach consumers. A structured methodology to quantify profiteering, coupled with heavy penalties for non-compliance, cannot be ruled out. Even selective price fixation for essentials could be on the table to keep inflation in check,” another tax expert said.
Experts suggest that if the government considers a new NAA-like framework, GST 2.0 must focus on transparent methodologies, faster dispute resolution, and a compliance-driven approach, reserving penalties strictly for deliberate profiteering.
