Skip to main content

Govt sets in motion anti-profiteering mechanism

Govt sets in motion anti-profiteering mechanism
Businesses not passing on the benefits of lower tax incidence under the goods and services tax may be in for trouble, with the government notifying the standing committee to receive complaints on profiteering. A four-member standing committee, comprising two officers each from the Centre and states, will examine the complaints and refer cases for investigation if they find merit.

“If you have got any complaints, you can send it to the standing committee or state-level screening committee,” said Revenue Secretary Hasmukh Adhia at the Business Standard GST Round Table. The detailed procedure for approaching the committees will be announced soon, he added.

Meanwhile, states are in the process of notifying the state-level screening committees, which will also include central government nominees. The anti-profiteering law is a deterrent mechanism under the GST that makes it mandatory for businesses to pass on the benefits arising out of lower tax incidence from rate reduction or input tax credit to the consumer. It is a three-tier mechanism, with the final call to be taken by the authority not yet set up.

The price reduction must commensurate with the reduction in tax incidence. Erring companies will be asked to lower price of the product concerned prospectively and part with the amount profiteered before. The respective committees would refer cases for further investigation to the Directorate General of Safeguards. Complaints pertaining to local companies would be first sent to the state-level screening committee, whereas those of the national level would be sent to the standing committee.

“DG Safeguards would generally take twothree months to complete the investigation and send the report to the anti-profiteering authority,” said Adhia.

Manish Kumar Sinha, commissioner, Central Board of Excise and Customs, said that committees set up will soon come out with guidelines, which will give a clearer picture on the anti-profiteering mechanism. He added that the anti-profiteering authority will not be doing a roving investigation on who is passing on the benefit.

The Business Standard, New Delhi, 07th September 2017

Comments

Popular posts from this blog

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…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…