With the formal announcement for the landmark GST roll-out made, while acquainting yourself with the various facets that might affect you as a citizen of India, you might have many a times comes across this anti-profiteering clause in respect of GST.
What is Anti-Profiteering Clause all about in GST and how it shall come to the rescue of end users of thousands of goods and services?
To check that the different industries do not enter into any sort of malpractices and adhere to the rates decided by the government in respect of thousands of goods and services under the new GST, the anti-profiteering provides for armor to the government. The authority is supposed to be created to check any such incidence when the different industries do not reduce the rates on goods and services as being revised lower under the GST regime.
To understand it better
Say for instance, the service being offered by an air-conditioned hotel has seen the rates slashed under GST from the current 22% to 18% and in case the hospitality industry doesn't complies with the new indirect taxation regime, government will play down heavily on them by making use of the anti-profiteering clause. Note in the latest meet, the rates for the five star hotel have also been slashed to 18% from the earlier 28%.
Instances where Anti-profiteering laws were made use of
In the Indian context, it was used in the West Bengal Anti-Profiteering Law of 1958.
Is a separate authority under anti-profiteering a need, when CCI exist to check on the interest of the end-consumers?
Though there are chances that industries resort to cartelization and any such unruly behavior and not comply with GST guidelines, a separate entity need not be created when there exists the Competition Commisssion of India which primarily acts on safeguarding consumers interests.
Tweaks In the latest GST Council meet with respect to anti-profiteering provisions under GST
To make the law more palatable for the industry folks, a penalty amount equivalent to the amount earned or gained by not passing on the lower rates benefit under the GST to the consumers shall be payable by all such businesses resorting to such dealings in the market.
To make it understand how the committee entrusted for the work shall function, Adhia, Revenue Secretary is quoted in one of the leading business dailies reports saying " "The DG of Safeguard will then take about three months to investigate the complaint and send its findings to the anti-profiteering authority," Adhia explained."We may be able to refund the penalty to consumers in the case of commodities that can be tracked. However, for other commodities, the penalty amount will be deposited in the consumer welfare fund as provided under the GST Act".
It is to be noted that the first line of action in respect of any complaints shall be handled first by the officers designated for the purpose in the State and Central government and then shall be carried on to the Director General of Safeguard.