Quasi-judicial body likely to curb profiteering post GST
Sun, Mar 05 2017. 05 07 PM IST
The GST council, headed by Arun Jaitley, may decide to refer complaints of profiteering to the consumer forum, or set up a new body or a quasi-judicial authority
Under the new GST regime, which is likely to kick in from 1 July, all traders and industries will have to get register with the GST network to pay taxes, file return and claim refunds. Photo: Mint
New Delhi: The all-powerful GST council may set up a quasi-judicial authority or rope in an existing body to protect consumers from profiteering by business entities under the goods and services tax (GST) regime.
The model draft GST law, unveiled in November last year, had proposed an anti-profiteering mechanism to ensure benefit of lower taxes is shared with consumers.
A senior finance ministry official said GST being one-nation-one-tax will lead to doing away with current system of tax-on-tax and any reduction in tax rate will have to be passed down to consumer. As of now, central excise is levied on a produce manufactured at a factory. When it is sold, a VAT is levied on not the ex-factory price but on the rate arrived at after including the cost of manufacture and excise duty. With GST, this practice will go away.
The GST regime, the official said, provides for giving the power to protect consumer interest to either an existing authority or creating a new one.
The GST council, headed by Union finance minister Arun Jaitley and comprising all state representatives, may decide to refer complaints of profiteering to the consumer forum, or set up a new body or a quasi-judicial authority, he said. “We won’t be sending inspector to trading or manufacturing establishments,” the official said. “The anti- profiteering clause is an enabling provision and an authority can be set up if the council feels there is a need.”
A full-fledged authority can be created if profiteering is rampant and there are complaints from public, he said.
As per the draft, an authority can be constituted or an existing one entrusted with the task to examine that the input tax credits or reduction in tax rates are passed by registered taxpayers to consumers.
The official, however, said there is not going to be a drastic reduction in tax rates as the effort would be put fit a good or service in the nearest tax slab of the four-tier structure of 5, 12, 18 and 28% approved by the council.
Tax rules, he said, will come to the GST council meeting sometime later this month or early next month.
Under the new GST regime, which is likely to kick in from 1 July , all traders and industries will have to get register with the GST network to pay taxes, file return and claim refunds.
The official said 75% of the registration is finished in states. E-permit will be issued by GST-Network at the time of departure if someone is sending goods overseas, he said, adding the commodities, goods and services which are to be exempt from GST will be taken up at the meeting of the council later