Anti-profiteering agency soon

The proposed National Anti-Profiteering Authority will have enough teeth to ensure that companies pass on the benefit of reduced taxes under GST to consumers.

According to the mechanism finalised by the Goods and Services Tax (GST) Council in its meeting on Saturday, the new agency can summon representatives of any company against which a complaint has been filed, and also initiate investigations through other government wings such as the Directorate of Data Analytics or the Directorate General of GST.

Apart from ordering an immediate reduction in prices, the proposed authority may also be allowed to levy a fine or call for a refund from the erring company. Its orders can be appealed against in the High Court.

Finance Minister Arun Jaitley had on Saturday said the Agency will include officers of the Union Finance Ministry and States.

Sources said the authority is likely to be notified soon and that it would begin monitoring prices immediately, so as to ensure that companies don’t hike prices in anticipation of GST, which kicks in from July 1.

“The rates have been made public and there could be a fluctuation in prices. It was seen even when the value added tax (VAT) was introduced,” said an official source.

Earlier, Revenue Secretary Hasmukh Adhia had warned that any changes in prices of goods and services will be monitored closely.

The GST Acts have a provision for an anti-profiteering authority to ensure “any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices”.

The GST Council, in its 15th round of discussions on June 3, had finalised the tax rates for items including gold, footwear, biscuits, textiles, apparel and agricultural machinery.

While gold, silver and processed diamonds will be taxed at the rate of 3 per cent, biscuits will be taxed at a uniform 18 per cent under GST.

It also announced dual rates for footwear and textiles to ensure that the common people are not impacted by higher taxes under the new regime. Footwear priced up to ₹500 will be taxed at five per cent, and those costing upwards of the amount, at 18 per cent.

Similarly, readymade apparel priced up to ₹1,000 would be taxed at five per cent under GST, while costlier clothes would attract a tax of 12 per cent.

Meanwhile, fibre of silk and jute will not attract any tax under GST. Cotton and other natural fibres as well as all categories of yarn will attract a tax of five per cent. A higher GST rate of 18 per cent will be levied on both man-made fibre and yarn. It also approved rules for transition and return filing.

The Council will now meet on June 11 when it will finalise rates for lottery and also finalise the draft rules for accounts and records and the e-way Bill.

The GST Council could also review the rates on any items that States may propose in its next meeting. “There was no re-think (on the rate) of any item. It will be discussed in the next meeting,” Jaitley had said.

COMMENT NOW