Economy

GST: FinMin warns firms against ‘profiteering’

Surabhi Srinagar | Updated on January 11, 2018


The Finance Ministry has warned India Inc not to raise prices in anticipation of the Goods and Services Tax, saying such a move could invoke the anti-profiteering clause even now.

“The machinery for the anti-profiteering authority may not be ready at present, but any change in prices will be called into question,” Revenue Secretary Hasmukh Adhia said on Friday.

His comments came after the GST Council finalised the rates for goods and services, giving companies adequate time to work out their pricing policies.

Adhia said the Centre would soon begin work on setting up an anti-profiteering agency, as proposed in the GST law, so as to ensure that companies pass on the benefit of lower taxes to consumers. The Centre, he said, could even take suo motu action against firms engaging in profiteering.

Meanwhile, the government also said that despite the higher standard rate of 18 per cent, service providers would get input tax credit, which will lower the effective incidence of GST.

However, analysts said consumers might end up bearing the brunt of the higher tax.

“The 18 per cent tax on most services would lead to a 20 per cent hike in the bills of most services including telecom,” said Priyajit Ghosh, Partner, Indirect Tax, KPMG in India.

Calling for more sensitive treatment of telecom, Uday Pimprikar, Tax Partner, EY India, said, “Imposing 18 per cent tax on telecom is likely to increase the overall tax burden and therefore may have a negative impact on the consumer expense. It needs to be appreciated that telecom is a necessity and an extremely important infrastructure service.”

Published on May 19, 2017

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

null
This article is closed for comments.
Please Email the Editor

You May Also Like