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CMA Final · Indirect Tax Laws and Practice · Anti-profiteering

Under the anti-profiteering provision, which of the following is correctly stated about the Authority and the term 'profiteered'?

The Authority includes the Appellate Tribunal for this section, and 'profiteered' means the amount determined on account of not passing the benefit of a tax rate reduction or input tax credit to the recipient by commensurate reduction in price. The other statements misdescribe the Authority or the term.

  1. AThe Authority includes the Appellate Tribunal, and 'profiteered' means the amount determined on account of not passing the benefit of rate reduction or input tax credit by commensurate price reductionCorrect
  2. BThe Authority excludes the Appellate Tribunal, and 'profiteered' means the entire sale price of the supply
  3. CThe Authority includes the Appellate Tribunal, and 'profiteered' means the tax collected in excess of the legally payable rate only
  4. DThe Authority is the Standing Committee, and 'profiteered' means ten per cent of the supply value

Explanation

Explanation 2 provides that 'Authority' includes the Appellate Tribunal. The Explanation to the penalty provision defines 'profiteered' as the amount determined for not passing on the benefit of rate reduction or input tax credit through commensurate price reduction. Other options misstate one or both parts.

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