GST anti-profiteering agency for passing on gains to buyers

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NEW DELHI: The government on Sunday said that businesses will have to ensure that the entire benefit of lower tax incidence, including input tax credit, is passed on to consumers or else face action from a five-member Anti-Profiteering Authority for GST. Similarly, any price increase has to be in line with tax incidence.

At the same time, the government hopes that the clause in the central and state legislations will not be used frequently. “We want to use it as a deterrent,” finance minister Arun Jaitley said. But the GST Council went ahead and put in place a three-stage mechanism to deal with consumer complaints drawing upon the experience in Australia, which used the clause successfully. Malaysia had witnessed a surge in prices, despite an agency to keep a watch on price movements, prompting the government to put in place the mechanism, which will exist for two years.

Asked about the concerns related to real estate reported by TOI on Saturday, government officials said that developers will have to renegotiate prices for the remaining part of construction and ensure that the gains are passed on. As reported by TOI, revenue secretary Hasmukh Adhia said he has written to the housing ministry to ensure that the benefits are passed on to consumers. Failure to do so will attract anti-profiteering action, an official said.
The Authority, to be headed by a retired secretary-level officer, can also take suo motu action, besides acting on complaints of profiteering. It will ask businesses to refund the price reduction on a proportionate basis to consumers. Where the consumer cannot be identified, the amount would be credited to the consumer welfare fund, an official said.

A search-cum-selection committee will be set up for finalising the members of the anti-profiteering authority and it is expected to be in place in around two months. Besides the chairman, the four other members of the authority will be joint secretary-level officers from the states or the Centre.

Source: http://timesofindia.indiatimes.com/business/india-business/gst-anti-profiteering-agency-for-passing-on-gains-to-buyers/articleshow/59211112.cms

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