The anti-profiteering mechanism under GST has kicked in with the government allowing consumers to file complaints against any irrational profit made by businesses by not passing on cost reduction benefit to buyers.
The anti-profiteering mechanism under GST has kicked in with the government allowing consumers to file complaints against any irrational profit made by businesses by not passing on cost reduction benefit to buyers. Revenue Secretary Hasmukh Adhia said the government has notified the ‘standing committee’ comprising four officers — two each from the Centre and states for receiving complaints on profiteering. Besides, states are in the process of notifying the state level ‘screening committees’, which will also include central government nominees. “If you have got any complaints you can send it to the standing committee or state level screening committee,” Adhia said at a GST roundtable organised by the Business Standard newspaper. The detailed procedure for approaching the committees will be announced soon, he added.
As per the structure of the anti-profiteering mechanism in the GST regime, complaints which are of local nature would be first sent to the state-level ‘screening committee’, while those of national level would be sent to the ‘Standing Committee’. If the complaints have merit, then the respective committees would refer the cases for further investigation to the Directorate General of Safeguards. Adhia said the DG Safeguards would generally take 2-3 months to complete the investigation and send the report to the anti-profiteering authority.
Although members of the anti-profiteering authority, to be headed by a Secretary level officer with four Joint Secretary level officers as members, is yet to be finalised, by the time the investigation on the complaints is complete, the authority would be in place, he said. The Goods and Services Tax (GST) was rolled out from July 1 and the government has advised businesses to pass on the benefit of any cost reduction to buyers. The anti—profiteering authority, if it finds that a company has not passed on the GST benefits, will either direct it to pass on the benefits to consumers or if the beneficiary cannot be identified, will ask the firm to transfer the amount to a ‘consumer welfare fund’ within a specified timeline. The authority will have the power to cancel
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 it would probably be the last step against any violator. The authority can suggest return of the undue profit earned from not passing on the reduction in incidence of tax to consumers along with 18 per cent interest, as also impose a penalty.
A five-member committee headed by Cabinet Secretary P K Sinha, comprising Adhia, CBEC Chairman Vanaja Sarna and chief secretaries from two states, would finalise the Chairman and members of the authority, which would have a term of two years.