New Delhi: The government on Tuesday appointed the chairman and members of the Anti-Profiteering Authority tasked with ensuring that the benefit of reductions in the tax burden under the goods and services tax (GST) reaches consumers and is not pocketed by businesses and traders.
B.N. Sharma, a senior revenue department official, was named chairman of the authority, which will try to make sure that wherever the tax burden has come down by way of rate cuts or rebates, there is a corresponding reduction in prices.
If not, the body can ask businesses to cut prices and return the “undue benefit” to consumers with 18% interest.
The members of the authority who are selected from the tax administration or from tax tribunals are J.C. Chauhan, Bijay Kumar, C.L. Mahar and R. Bhagyadevi.
The creation of the body signals the resolve of central and state governments to ensure that revenue forgone by way of tax reduction, which impacts the state’s ability to spend on development, goes to the intended beneficiary.
With the compensation paid by the central government for the shortfall in revenue, states have been able to meet their tax collection targets in the GST regime so far, while the Union government’s revenue estimates have fallen short of target in the August to November period, the finance ministry said on Monday. The below-expected revenue in the GST regime is on account of tax cuts, including in the highest bracket of 28% which the GST Council has announced over the last few months.
Under pressure from traders and businesses, who found the new tax regime more rigorous, the GST Council has also temporarily suspended some of its sophisticated features meant to ensure strict compliance.
“As its first chairman, B.N. Sharma is expected to give a direction to the Authority in boosting the confidence of consumers that GST is a ‘Good and Simple Tax’ in the overall national interest,” the finance ministry said in a statement.
Experts said the task before the authority is to evolve norms to identify instances of “anti-profiteering” for different sectors as defined in GST laws.
“The appointment of the chairman of the anti profiteering authority signifies that the government is very keen to begin taking steps to ensure that rate reductions and input tax credit benefits are passed on to consumers. It is essential that the methodology to determine profiteering in various businesses is prescribed at the earliest. Many businesses have already passed on the benefits and the rest would now follow,” said M.S.Mani, partner, GST, Deloitte India.
The authority has a standing committee at the national level and state-level panels which will accept complaints from consumers. The watchdog will be assisted by the Directorate General of Safeguards in the central government for investigations into suspected cases of profiteering.