Modi government allays fears of ‘inspector raj’ under GST


NEW DELHI: Addressing fears that an “anti-profiteering” clause in the draft goods and services tax (GST) law may spell the return of inspector raj, the Centre stressed that the provision is an enabling element and will be invoked only in the event of significant violations.

“The clause is an enabling provision in case it is noticed that intended benefits of a GST law are not being passed on to consumers. The government has no plans to set up an inspection machinery and no punishment has been prescribed,” revenue secretary Hasmukh Adhia told TOI .

The provision was made a part of the draft GST laws released on Saturday to ensure that the Centre has an option in dealing with traders who do not pass on to consumers any reductions under the tax reform measures. This is seen as a step to protect consumers against any price spike.

The view in the government that there was a need for a redressal option was strengthened by the experience of demonetisation as individuals and business entities hunted for inventive means to beat the ban on old currency.
The Centre is, however, keen to assure investors that it does not intend to set up any authority to inspect transactions and the job, if need be, can be done by empowered consumer forums or similar bodies.
The GST is intended as a “one nation, one tax” solution and this objective as well as the government’s credibility will be hurt if refunds are suppressed and an additional charge is levied on consumers.

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