Skip to main content

Authority's orders favour firms for anti-profiteering in times of GST

Authority's orders favour firms for anti-profiteering in times of GST
The NAA is currently looking into 50 complaints and will issue the orders in the coming weeks
Allaying industry’s apprehensions, all three orders passed by the National Anti-Profiteering Authority under the goods and services tax (GST) regime have so far gone in favour of companies.
In its latest order, the five member NAA has dismissed complaint against elevator manufacturer Schindler India for charges of profiteering filed by a Delhi business. The complaint pertained to charging of service tax on the payment made to Schindler India before GST implementation on July 1, 2017 and GST for the payment installments made in July when the installation took place.
However, since elevators were delivered to the firm before July 1, the tax had been charged without excluding the pre-GST regime excise duty. Hence, the applicant was charged twice — once on the pre-GST excise duty and subsequently on the full value of the material used in the lift.But even before the NAA order, the complainant had requested for withdrawal of application, citing inadequate understanding of GST provision at the time of filing the complaint in September last year. But the authority considered the investigative report of the Directorate General of Safeguard (DGS) before dismissing the petition.
“In respect of the two invoices date July 27, 2017, as the installation of the second lift had been completed after coming into force of the CGST Act, 2017, he was liable to be charged GST at the rate prevalent on July 27, 2017,” the NAA order delivered by three members of the authority, including chairman BN Sharma, said.
Authority's orders favour firms for anti-profiteering in times of GST
The anti-profiteering mechanism is a three-stage process: A state-level screening committee for local complaints and a standing committee for national-level complaints; investigation by the Directorate General of Safeguards, and a probe by the NAA.“The NAAis trying to understand the business. Pricing doesn’t depend only on rates. They have been selective and methodical in approach,” said Pratik Jain, national leader, indirect tax, PwC India.
The NAA is currently looking into 50 complaints and will issue the orders in the coming weeks.The authority also dismissed charges against Basmati rice-exporting firm KRBL for not passing on price reduction benefits under GST. Before that, it had dismissed the complaint against Vrandavaneshwaree Automotive, a Bareilly-based Honda car dealer, by concluding that it did not contravene the anti-profiteering provisions of the CGST Act
Rajat Mohan, partner, AMRG & Associates, said the journey has so far been smooth for the industry. “After more than 300 days of implementation, the NAA has passed only two orders, both of which were in favour of industry,” he said.The NAA is chaired by BN Sharma and is assisted by four senior officials of the rank of joint secretary and above.

The Business Standard, New Delhi, 12th June 2018

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…