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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Compliance Rating, Anti-Profiteering, GST Practitioners and Authorised Representative

Which statement about the meaning of 'profiteered' and the 'Authority' in Section 171 is correct?

Profiteered is the amount arising from not passing on the benefit of a tax rate reduction or input tax credit to the recipient through a commensurate price reduction, and the term Authority in the section expressly includes the Appellate Tribunal.

  1. AProfiteered means the amount determined on account of not passing the benefit of rate reduction or input tax credit to the recipient by commensurate price reduction; the Authority includes the Appellate TribunalCorrect
  2. BProfiteered means only the extra profit earned over the previous year's profit; the Authority excludes the Appellate Tribunal
  3. CProfiteered means the amount of tax collected in excess of the tax paid to the Government; the Authority includes only the Council
  4. DProfiteered means the penalty payable by the supplier; the Authority includes only the Central Government

Explanation

The Explanation to Section 171(3A) defines profiteered as the amount determined on account of not passing on the benefit of rate reduction or input tax credit by commensurate price reduction. Explanation 2 states that the Authority includes the Appellate Tribunal. The other options misstate one or both definitions.

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