Un­due profit of over Rs 1 cr to come un­der GST author­ity’s lens

The Northlines - - BUSINESS -

The pro­posed an­tiprof­i­teer­ing author­ity un­der the new GST regime will take up for scru­tiny only those cases that have mass im­pact and those where un­due profit of more than Rs 1 crore has been earned, a se­nior gov­ern­ment of­fi­cial said. A five mem­ber Na­tional Anti-prof­i­teer­ing Author­ity, headed by a sec­re­tary-level of­fi­cer, will be set up soon to keep a tab on busi­nesses that have not passed on to con­sumers the ben­e­fit of lower tax rates un­der the Goods and Ser­vices Tax (GST) regime.

“It will take two-three months time to gauge whether the ben­e­fits of GST are be­ing passed on to con­sumers. By then, the author­ity would be put in place,” the of­fi­cial told PTI. As per the three tier struc­ture—the GST Im­ple­men­ta­tion Com­mit­tee (GIC) will re­ceive com­plaints and those which are state spe­cific and in­volv­ing smaller amounts will be trans­ferred to the state screen­ing com­mit­tee.

Other cases will be re­ferred to the Direc­torate Gen­eral of Safe­guards who will fin­ish in­ves­ti­ga­tion within 3 months and send the find­ings to the anti-prof­i­teer­ing author­ity, which will pass an or­der in another 3-months time.

“The is­sues which have a na­tional or mass im­pact will be taken up by the author­ity. There may be many small cases which would be com­ing to the GIC, but only those cases where the fi­nan­cial im­pli­ca­tion is more than Rs 1 crore would be taken up by the author­ity. Rest would be trans­ferred to the state screen­ing com­mit­tee,” the of­fi­cial said.

ADG Safe­guards will act as Sec­re­tary to the Na­tional Anti-prof­i­teer­ing Author­ity and will co­or­di­nate be­tween the author­ity and the DG Safe­guards of­fice, the of­fi­cial added.

The Cen­tral Board of Ex­cise and Cus­toms (CBEC) last week ap­pointed Sa­man­jasa Das as the Ad­di­tional Di­rec­tor Gen­eral (ADG) Safe­guards in the Direc­torate Gen­eral of Safe­guards.

Das was ADG in the Direc­torate Gen­eral of Cen­tral Ex­cise In­tel­li­gence (DGCEI).

In the three-tier struc­ture for mon­i­tor­ing anti- prof­i­teer­ing, the GST im­ple­men­ta­tion com­mit­tee, in­clud­ing four of­fi­cers each from the Centre and states and one of­fi­cer from the GST Coun­cil, will first re­ceive the com­plaints. There­after, DGS, which has the power to issue sum­mons, will con­duct in­ves­ti­ga­tion and give its find­ings to the author­ity.

The anti-prof­i­teer­ing author­ity, if it finds that a com­pany has not passed on the GST ben­e­fits, will ei­ther di­rect it to pass on the ben­e­fits to con­sumers or if the ben­e­fi­ciary can­not be iden­ti­fied will ask the com­pany to trans­fer the amount to the ‘con­sumer wel­fare fund’ within a spec­i­fied time­line.

The author­ity will have the power to can­cel reg­is­tra­tion of any en­tity or busi­ness if it fails to pass on to con­sumers the ben­e­fit of lower taxes un­der the GST regime, but it would prob­a­bly be the last step against any vi­o­la­tor. Ac­cord­ing to the an­tiprof­i­teer­ing rules, the author­ity will sug­gest re­turn of the un­due profit earned from not pass­ing on the re­duc­tion in in­ci­dence of tax to con­sumers along with an 18 per cent in­ter­est, as also im­pose penalty.

A five mem­ber com­mit­tee, headed by Cabi­net Sec­re­tary PK Sinha, com­pris­ing Rev­enue Sec­re­tary Has­mukh Ad­hia, CBEC Chair­man Vanaja Sarna and chief sec­re­taries from two states, will soon fi­nalise the Chair­man and mem­bers of the author­ity.

It will be in ex­is­tence for just two years un­less the GST Coun­cil ex­tends the ten­ure. The chair­man will be paid a monthly salary of Rs 2.25 lakh plus other al­lowances and ben­e­fits, as are ad­mis­si­ble to a cen­tral gov­ern­ment of­fi­cer hold­ing posts car­ry­ing the same pay. Tech­ni­cal mem­bers will be paid a monthly salary of Rs 2,05,400.

The chair­man and mem­bers will hold of­fice for a term of two years or un­til the age of 65-years, which­ever is ear­lier. PTI

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