Skip to main content

Anti profiteering authority to be ready in a fortnight, says CBEC chief

Anti profiteering authority to be ready in a fortnight, says CBEC chief
The proposed anti-profiteering authority, which will monitor pricing behaviour of businesses under GST, will be up in a fortnight, says CBEC chief Vanaja N. Sarna Businesses will shortly have a new regulator taking a penetrating gaze over their affairs.
The proposed anti-profiteering authority that will monitor pricing behaviour of businesses will be up and running in a fortnight, said Central Board of Excise and Customs (CBEC) chairperson Vanaja N. Sarna‎.
A selection panel led by Cabinet secretary P.K. Sinha has asked states to suggest candidates for the five-member authority, including the chairperson, while the Union government has sent a list of its nominees to states for state-level screening panels that are part of the authority’s ecosystem, said the CBEC chairperson. 
State-level panels will watch out for instances of businesses not passing on benefits of tax reduction to consumers in the goods and services tax (GST) regime.
During the two-year transition into the GST regime that started in July, the National Anti-profiteering Authority will step in and ask businesses that have not passed on full benefits of a reduced tax burden to consumers to make up for it with interest.
In rare cases, a profiteering business could lose its GST registration too.
“We are expecting nominations (to the Authority) from states in another two weeks. As soon as all these names come in, the Authority will be ready,” said Sarna.
The Authority will be assisted by a four-member standing committee with two state officials. For this, the Union government prefers tax officials from states which are closer to the capital such as Haryana, to be able to hold quick meetings. 
GST’s impact on prices is top on the minds of Union and state policy makers keen to demonstrate that the indirect tax reform benefits the ultimate consumer. That involves not just ensuring that benefits are passed on to consumers, but also convincing them that the higher tax rates they may see on invoices in many cases in the transparent GST regime do not mean that tax burden has gone up. Consumers were not aware of the real burden of embedded taxes on products and services in the earlier regime. 
“Your invoice today specifies central GST, state GST and the cess where applicable. In the earlier regime, consumers could only see the standard rate of value added tax (VAT) of 14.5%, not the central excise duty levied at factory gates of 12.5%, which together led to an actual 27% tax burden. Today the same commodity may be at 18% GST. In the case of cosmetics taxed at 28% GST rate, the increase is only of one percentage point,” explained the CBEC chairperson. 
Industry associations, NGOs and small traders have been making representations to the GST Council for rate revisions on items like sanitary napkins, mixtures (of nuts and other edible items) and some tractor parts. At its 5 August meeting, the GST Council led by finance minister Arun Jaitley brought down tax rates on work outsourced by the labour intensive textile sector and on tractor parts. However, as the new tax system settles down, more rate revisions are unlikely except in cases where there is an unintentional impact on tax burden such as on tobacco.
Sarna said that rolling out GST is also likely to stimulate the direct tax receipts of the government. “Many more assessees are coming into the GST fold, including from the unorganized sector. Earlier, the central excise duty exemption limit was Rs1.5 crore, while the exemption limit for GST is Rs20 lakh annual sales. Also, those who want to claim input tax credit will take GST registration. New GST registrations will favourably impact direct taxes as well,” said she. 
On 4 August, Jaitley said that 7.2 million of the 8 million registered indirect tax assesses under the old regime have registered for GST, in addition to 1.3 million new dealers who have sought GST registration.
The Hindustan Times, New Delhi, 23th August 2017

Comments

Popular posts from this blog

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

Differential Tax Levy under GST:Food Firms May De-Register Trademarks The government’s decision to charge an enhanced tax rate on trademark food brands is leading several rice, wheat and cereal manufacturers to consider de-registering their product trademarks. Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers and bearing registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries. Sources say that the move has affected the packaged rice industry the hardest and allowed the un-registered market leaders, India Gate and Daawat, to gain advantage as compared to other registered brands such as Kohinoor and Lal Qilla. Smaller players are even more worried with this enhanced rate of tax (against the otherwise …