WILL THE ‘BIG FISHES’ LET YOU REAP THE BENEFITS OF THE RATE CUTS UNDER THE GST?

 

 

THIS IS HOW THE GOVERNMENT HAS ENSURED THIS…

When the GST bill was passed, opposition as well as some experts had expressed their concerns that the benefits of this icebreaking tax reform might not be passed on to the consumers and only a few market giants would be benefitted from it. To cater these apprehensions the government introduced the anti profiteering clause in the bill.

As per the section 171 of CGST/SGST Act, the benefits of any tax reduction and ‘input tax credit’ are mandatory to be passed on to the consumer in the form of proportionate reduction in price of the respective product.

In order to effectively implement the anti profiteering provision, the GST council has constituted a three-tier body called the ‘Anti Profiteering Authority’. The authority will register complaints, investigate into the matter and would penalize the culprit. The 3 branches under the anti profiteering provision are:

·         Standing committee

·         Director general

·         Anti-profiteering authority

Let’s take an example to understand how the Anti Profiteering law will work. Suppose, after the implementation of GST, a trader now pays Rs. 1000 less. In this case, he would have to sell the item for Rs. 1000 cheaper. If he fails to do this, he would be considered to be indulged in profiteering. The consumer can file a complaint against him with the Anti Profiteering Authority which will work as follows:

·         Standing committee will register complaint from consumers.

                   

·         After the examination of the report, standing committee will forward the complaint to the director general which will investigate into the case lodged by the consumer.

                                                                  

·         It would pass on the findings to an independent Anti-profiteering authority to give a final ruling.

The Central Government has empowered the authority to impose penalty, ask for returning the extra amount charged and to even cancel the licence of the culprit.

Note that in order to file the complaint, you’ll have to back your complaints with all the documents before the authority to prove that the benefits have indeed not been passed on to the consumer.

While this provision seems to be protracting the consumer in the Indian market, business houses and some market experts believe that it might lead to ‘inspector raj’ and they would find it difficult to increase the prices in future as there are chances that a price rise due to any other micro-macro economic reasons like increase in input cost would bring them under the scanner of the Anti Profiteering Authority. However the government has directed the authority not to take suo moto actions.