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
“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
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