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Cabinet clears setting up of GST anti profiteering body

Cabinet clears setting up of GST anti profiteering body
The Cabinet on Thursday set the ball rolling for establishment ofanational antiprofiteering authority amid reports that restaurants were not passing on the benefits of reduced goods and services tax (GST) rates to consumers.
The Cabinet cleared the creation of the posts of chairman and members of the authority, which will ensure consumers receive the benefits of reduced prices in the new indirect tax regime.
“This paves the way for immediate establishment of this apex body,” said Union law minister Ravi Shankar Prasad.
“The National AntiProfiteering Authority is an assurance to consumers.
If any consumer feels the benefit of tax rate cuts is not being passed on, he can complain to the authority,” the minister added.
The GST Council had last week decided to lower rates on about 200 items.
It had also reduced the rate on restaurants to five per cent.
There have been complaints that some restaurants are not passing on the benefits because input tax credit is not available to them now.
The Council had earlier approved the setting up ofafivemember authority for consumers to file complaints if price reductions were not passed on.Afivemember panel headed by Cabinet SecretaryPKSinha and comprising Revenue Secretary Hasmukh Adhia, CBEC Chairman Vanaja Sarna and chief secretaries from two states has been entrusted with the task of selecting the chairman and members of the authority.
“It is now expected that the government will soon notify the methodology to be used to determine whether profiteering has occurred,” said MS Mani, senior director -indirect tax, Deloitte.
“We are hopeful the body will take constructive measures, so that there is no return of the dreaded ´inspector raj´,”said Archit Gupta, chief executive officer, ClearTax.
The authority will haveasunset date of two years from the date the chairman assumes charge.
Complaints of a local nature will be sent to a state level screening committee.
Those at the national level will be marked toastanding committee.
These committees will refer cases for investigation to the Directorate General of Safeguards, which will send its report to the authority.
If the authority finds a company has not passed on GST benefits, it will either direct the company to refund consumers or transfer the amount toaconsumer welfare fund.
The authority can ask for returning undue profits to consumers along with 18 per cent interest.
It can also impose a penalty.
The authority will have the power to cancel GST registration of any business, but that will be the final step against any violator.
The Business Standard, New Delhi, 17th November 2017

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