GST: Anti-profiteering panel to levy penalty, have sunset date of two years
A five-member anti-profiteering authority will be set up to decide on levying a penalty if businesses do not pass on the benefit of price reduction to consumers under the goods and services tax regime.
New Delhi: A five-member anti-profiteering authority will be set up to decide on levying a penalty if businesses do not pass on the benefit of price reduction to consumers under the goods and services tax regime.
The authority to be headed by a retired secretary-level officer, can take suo motu action, besides acting on complaints of profiteering.
The GST Council, chaired by Union finance minister Arun Jaitley and comprising state finance ministers as members, on Sunday approved the anti-profiteering rules.
As per the norms, the authority will have a sunset date of two years and will decide on a penalty to be levied. It would ask the businesses to refund the price reduction on a proportionate basis to consumers.
Where the consumer cannot be identified, the amount would be credited to the consumer welfare fund, an official said.
A search-cum-selection committee will be set up for finalising the members of the anti-profiteering authority. Officials said it is likely to take about two months to finalise the members.
Besides the chairman, the four other members of the authority will be joint secretary-level officers who have been commissioners in central excise and service tax either at the Centre or states.
As per the structure, the complaints of profiteering would first come to the standing committee comprising tax officials from states and the Centre. It would forward the complaint to the Directorate of Safeguards (DGS) for investigation, which is likely to take about two-three months to complete the inquiry.
On completion of the investigation, the report would be submitted to the anti-profiteering authority which would decide on the penalty.
The Section 171 of the Central GST Act provides that any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit will be passed on to the recipient by way of commensurate reduction in prices.
Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal
Shortfall in GST compensation to states in the current fiscal estimated at Rs 2.59 lakh crore, of which about Rs 1.59 lakh crore would have to be borrowed