Government working fast to prevent anti-profiteering by companies after GST roll out

SRINAGAR: The government proposes to expedite the creation of the anti-profiteering mechanism under the goods and services tax (GST) law and could examine companies seen to have raised prices beforehand to avoid passing on the advantage of lower tax incidence to consumers.

“We will try and operationalise the machinery soon,” said revenue secretary Hasmukh Adhia.

“We will be calling companies in to question if they increased prices in months prior to GST rollout.” He said the government is not keen on using the anti-profiteering provision against companies and would urge them to pass on any reduction to consumers. The government will keep a close watch on price spikes.

He said the GST Council has conducted a detailed examination of the existing tariff structure and worked out what it should be. Care has been taken to ensure that effective incidence of tax under GST remains lower than the total effective tax now.

“Let us be honest… I would request industry to pass on the tax benefit that they will get due to reduction in rate and input tax credit to consumers,” Adhia said, adding that they should ensure prices do not pinch consumers after the rollout of GST.

Asked about rise in cost of telecom services with the introduction of GST, he said the sector would in fact face lower effective tax as it would get input tax credit for all the taxes paid on goods used and services consumed.

“All telcos should provide complete billing breakup to consumers,” said Adhia, adding that total incidence should come down.

Adhia had said earlier that the anti-profiteering clause is a transitory provision and was meant to shield consumers from any sudden spike in prices after the launch of GST.

Source: Economic Times