(GSTmitra-Series-15) πŸ“’ Anti-Profiteering in GST

β›³ ANTI-PROFITEERING in Indian GST [Sec. 171 of CGST Act]
🌴 Reduction in rate of tax on the supply of goods or services or
🌴 Benefit of input tax credit
🌴 By the registered person
🌴 By way of reduction in prices

🌴 Authority may determine the methodology and procedure for determination as to whether the reduction in rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices.

β›³ For any rate reduction in new tax regime
🌴 As regards passing of benefit due to rate reduction, in case of supplies exclusive of tax there should not be a big challenge, since reduction in tax rate will directly be evidenced by invoices and the recipient will get benefit of the rate reduction.
🌴 In case where contract of supplies is inclusive of taxes, this provision will cast responsibility on the supplier to reduce the price due to reduction in rate of taxes.
🌴 E.g., FMCG items which are normally sold on MRP basis or some other fixed prices by retailers, if there is any reduction in rate of tax it has to be passed on to the ultimate recipient.
🌴 Accordingly, there shall be need to revise MRP or other prices fixed for such supplies.

β›³ For any benefit of Input tax Credit
🌴 As regards passing of benefit due to better credit chain, it is going to affect almost all industries.
🌴 In most places, be it service sector, manufacturing, trading or any specific industry, all are going to get advantage of better flow of Input Tax Credit.
🌴 So the expectation of the provisions are commensurate reduction in prices of supplies.

CA. SHARMA Praveen
GST Trainer & Consultant
+91 9871530610, 8383073005