NEW DELHI: GST officers have one more task — conduct mock purchases to identify businesses that are not passing on benefits of lower taxes to consumers. With several stores and sectors such as real estate and restaurants found wanting, the government has decided to “proactively” use the provision of the Central Goods and Services Tax (CGST) Act to collect evidence against suppliers, who are “profiteering” by either keeping prices unchanged or not transferring the gains of credits for taxes paid on inputs and raw material.
The move comes as part of the government’s anti-profiteering drive, which is set to intensify in the coming days as commissioners have been given specific targets to identify 20 suppliers each and check their B2B invoices to ascertain if tax rate changes are being passed on or not as part of the exercise. Commissioners have also been allowed to set up specialised anti-profiteering cells.
The initiatives come along with the extension of the National Anti-Profiteering Authority’s tenure by another two years to deal with pending cases as well as act against fresh cases that are brought to its attention. Industry is, however, not pleased with the plan, arguing that the exercise lacks clarity. “Issuance of any clarification or SOP (standard operating procedure) on anti-profiteering measures would always be welcomed by the industry so long as it brings clarity on how profit needs to be computed and mechanism to pass on profit to the end-consumer. If the aforesaid two are not covered, merely covering ancillary issues is not likely to appease the industry,” said Harpreet Singh, partner at KPMG India.
