NAA plans to enforce GST rate cuts at factory-gate level
The National Antiprofiteering Authority (NAA) has moved to make sure that cuts in goods and services tax (GST) rates are enforced at the factory gate level itself rather than waiting for consumers to complain about businesses cornering the tax benefits meant for them.
Accordingly, manufacturers and wholesale dealers will now get calls from GST officials asking them to lower prices in line with tax cuts at the beginning of the supply chain so that the benefits naturally follow to consumers.
NAA is also in the process of putting in place a facility for anyone to dial up a number and file complaints under guidance from a tax inspector, said a person familiar with the development.
The proactive approach comes in the wake of NAA noting that there has not been a single complaint of profiteering from 17 states including Gujarat, Madhya Pradesh, Bihar, Punjab, Chhattisgarh, Tamil Nadu, Odisha, Goa, Jammu & Kashmir and Puducherry in spite of several rounds of tax cuts since the GST rollout in July 2017.
Gujarat, Maharashtra and Punjab are among the largest recipients of compensation from the central government for their GST revenue shortfall from projected levels. The sacrifice of tax revenue loses its purpose when the benefit does not reach the con- sumer, said the person quoted above.
In July, union minister Arun Jaitley said in a Facebook post that the loss to the exchequer from tax rate cuts on 384 commodities and 68 services since the GST rollout in 2017 was ₹70,000 crore. On July 21, the GST Council had slashed tax rates on several commodities, including refrigerators, television sets and air conditioners, from 28% to 18%.
NAA has alerted the Central Board of Indirect Taxes and Customs (CBIC) about the need for field officers to be vigilant about instances of businesses failing to pass on benefits of tax cuts to consumers.
It is also in touch with the federal indirect tax body, the Council, in this regard. “Field officers have to have their antennas open all the time,” said the person quoted above.
NAA has partnered with the department of consumer affairs’ online customer engagement platform ‘LocalCircle’ through which customers can raise issues and file complaints.
Experts said NAA’s latest approach of enforcing the effect of tax cuts on prices at the businessto-business level itself will have a positive effect.
“Consumers stand to benefit from NAA’s initiative of reaching out to businesses at an early stage in the supply chain to ensure tax benefits are passed on. However, it is desirable that its implementation on the ground does not result in inspector raj,“said Abhishek Jain, tax partner, EY.
State-owned GAIL India has sought shareholder nod to amend the charter of the company to invest in startups, build solar power plants and set up battery charging stations for electric vehicles as it looks to diversify its portfolio beyond gas and petrochemicals.
Country’s biggest natural gas transporting and marketing firm wants to insert six new sections in the main objects clause of the memorandum of association of the company, according to shareholder notice. It wants to invest in “startups in core business areas (of natural gas, petrochemicals, and energy) and non-core areas (like health, social and environment, safety, and security) either directly or indirectly.”
“The investment can be made through special purpose vehicle (SPV), alternative investment fund (AIF), fund of funds (FoF) and trust,” it said.
GAIL said that there is a necessity to adopt new pathways to provide clean, cost-effective and efficient mobility services that are safe, reduce dependence on oil imports and achieve more efficient land-use in cities with the least environmental footprints and on human health. With the objective in mind, the firm wants to set up “battery charging stations and providing charging services” to electric vehicles.
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