GST: Anti-profiteering body likely to be in place by August
The Finance Ministry is looking to soon put in place a body to remove confusion over the pricing of items after the rollout of the Goods and Services Tax. The proposed National Anti Profiteering Authority, could be in place soon, reports said, adding that the Finance ministry aims to set it up by August. The body has been envisaged under the GST to ensure that businesses pass on the benefit of taxes to the consumers and there is no unwarranted price rise.
“The process for selection of members and the Chairman will start soon. We are working to ensure that the authority can be set up by early next month, if not this month itself,” Hindu Business Line quoted an official source as saying, adding that the entire architecture at the State and Central level should ideally be ready at the same time.
The anti-profiteering rules under the GST provide for cancellation of registration of any entity or business if it is found guilty of not passing on the benefit of lower tax rates or input tax credit to the consumers. Cancellation of registration is in addition to the power to levy penalty that was prescribed under the law. According to the relevant rules notified by the government, the National Anti-profiteering Authority can recover the excess profits made by the firm with an interest of 18 per cent and impose penalties on it.
The anti-profiteering rules under the GST laid down a three-tier structure for the Authority. These will include a Standing Committee on Anti-profiteering, State-level Screening Committees, and a National Anti-Profiteering Authority. The process of finding offenders involves verification of the complaint by a standing committee of officers. If there is merit in the case, it will be investigated by the director general of safeguards. Based on the report submitted, the authority will decide the quantum of punishment. The entire process will take eight to 11 months.
BusinessLine reported citing sources that a search-cum-selection committee led by Cabinet Secretary PK Sinha is expected to shortlist candidates for the chairman of the authority. The GST Council will also vet appointments to the five-member panel. Meanwhile, state governments have also been asked to work on their respective Screening Committees, which are to examine complaints forwarded to them.
The anti-profiteering rules have led to apprehensions and confusion among businesses due to its strict penal provisions and lack of clarity. Finance Minister Arun Jaitley had earlier expressed hope that the provision for an anti-profiteering authority would act as a deterrent and that the government does not intend to use it unless forced to.
The government believes that it passing on of GST benefits to the consumers is crucial to the success of the tax reform. Monitoring of prices of essential items has been one of the major tasks of the government since the rollout of GST on July 1.
The government also says that a large number of businesses have been cooperating and a number of companies such as auto makers and mobile phone companies have already changed prices based on the new tax incidence.
A central monitoring committee of 15 secretary-level officials will meet every Tuesday to review the GST rollout, including issues such as prices and supply.