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Tuesday, December 12, 2017

GST rate cut: Cabinet clears anti-profiteering authority

Friday, 17 November 2017 11:25
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New Delhi, November 16: The Union Cabinet on Thursday approved the setting up of a National Anti-profiteering Authority under the GST, seeking to ensure consumers get the benefit of reduced prices under the new indirect tax regime.

Union Minister Ravi Shankar Prasad said currently there were only 50 items that attracted the highest tax of 28% under the Goods and Services Tax (GST) regime and rates on many items have been cut to 5% as well.

“The National Anti-Profiteering Authority is an assurance to consumers of India. If any consumer feels that the benefit of tax rate cut is not being passed on, then he can complaint to the authority,” Mr. Prasad told reporters after the Cabinet meeting.

This reflects government’s full commitment to take all possible steps to ensure benefits of implementation of GST to the common man, the minister added.

The approval by the Cabinet paves the way for immediate establishment of the apex body, which is mandated to ensure that the benefits of GST rate reduction is passed on to consumers.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising State counterparts, had last week decided to slash tax rates of over 200 items in the GST regime as well as lowered tax rates on AC and non-AC restaurants to 5 %.

The Council had earlier approved setting up of a five-member National Anti-Profiteering Authority to enable consumers to file complaint in case price reduction was not passed on.

A five-member committee, headed by Cabinet Secretary P.K. Sinha, comprising Revenue Secretary Hasmukh Adhia, CBEC Chairman Vanaja Sarna and chief secretaries from two states, has been entrusted to finalise the chairman and members of the authority.

The authority will have a sunset date of two years from the date on which the chairman assumes charge. The chairman and the four members of the authority have to be less than 62 years old.

As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature will be first sent to the State-level ‘screening committee’, while those of national level will be marked for the ‘Standing Committee’.

If the complaints have merit, the respective committees would refer the cases for further investigation to the Directorate General of Safeguards (DGS). The DG Safeguards would generally take about three months to complete the investigation and send the report to the anti-profiteering authority.

If the authority finds that a company has not passed on GST benefits, it will direct the entity to pass on the benefits to consumers. If the beneficiary cannot be identified, it will ask the company to transfer the amount to the ’consumer welfare fund’ within a specified timeline.

The authority will have the power to cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes under the GST regime, but that might be the final step.

According to the anti-profiteering rules, the authority will suggest a return of the profit that the vendor unduly earned by not passing on benefits of the reduction in tax incidence to consumers along with an 18% interest, as also impose a penalty. (PTI)


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