GST OFFICERS TO ENSURE COMPANIES PASS ON BENEFITS TO CONSUMERS
The anti-profiteering watchdog has asked goods and services tax (GST) officers to keep a close tab on businesses to ensure that the benefit is passed on to the consumer.
However, tax experts cautioned it could lead to harassment for taxpayers if not done in a judicious manner.
The National Anti-profiteering Authority has asked the Central Board of Indirect Taxes and Customs (CBIC), the nodal department for the GST, to instruct commissioners to carry out checks on companies and businesses for profiteering. “The GST law authorises commissioners to file profiteering complaints if they find that rate cuts or availability of input tax has not resulted in commensurate reduction in prices,” said an NAA official. DILASHA SETH writes
Weeks after goods and services tax (GST) rate reduction on over 100 items including consumer durables, the anti-profiteering watchdog has asked GST officers to keep a close tab on businesses to ensure benefits are passed on to end consumers.
However, tax experts cautioned that it could lead to harassment of taxpayers at the ground level if not done in a judicious manner.
The national anti-profiteering authority has asked the central board of indirect taxes and customs (CBIC), the nodal department for GST, to instruct commissioners to proactively carry out checks on companies and businesses for profiteering.
“The GST law authorises commissioners to file profiteering complaints if they find that rate cuts or availability of input tax have not resulted in commensurate reduction in prices. They must be proactive, especially after the July rate cuts, considering that consumer awareness in the country remains low,” said an NAA official.
Of the over 100 profiteering complaints being examined at different levels, only 7-10 have been filed by commissioners of various states. Rates were cut on more than 100 items in July, including refrigerators, washing machines, small-screen television sets, perfumes, cosmetics, vacuum cleaners, and shavers.
According to rule 128 of the Central GST Act, the standing committee under the anti-profiteering mechanism will examine complaints and evidence provided by an interested party or a commissioner.
“Even commissioners are authorised by law to file complaints. But only a handful of complaints have been filed by them,” pointed out an official.
The NAA is looking at nine cases and will issue orders on those in the coming weeks. About 30 cases are with the DG anti-profiteering, 31 with the standing committee and 57 with screening committees.
“The CBIC while tasking the commissioners to take up antiprofiteering matters, should ensure that the same is done judiciously and without causing harassment to the taxpayers at the ground level”, said Abhishek Jain, partner at EY India.
Pratik Jain, partner at PwC India, said it was important to ensure that this process does not become discretionary, without any specific guidelines on anti-profiteering. “It should be clear what kind of information is needed and what outcome is expected to be achieved. Also, if an enquiry is with respect to a particular product, details about other products should ideally not be sought,” he said.
He added that for the industry, it means that necessary documentation and explanations should be kept ready, which demonstrates that GST benefits have been passed on to the consumers.