ANTI PROFITEERING MEASURES IN GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 21-4-2017<\/p>\n
The GST law contains a unique provision on anti-profiteering measure as a deterrent for trade and industry to enjoy unjust enrichment in terms of profit arising out of implementation of Goods and Services Tax in India, i.e., anti-profiteering measure would obligate the businesses to pass on the cost benefit arising out of GST implementation to their customers.
\nThe provisions are contained in the GST law as per following provisions:
\nCGST Act, 2017
\nSection 171 on Anti-profiteering measures
\nIGST Act, 2017
\nSection 20 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to IGST Act
\nUTGST Act, 2017
\nSection 21 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to UTGST Act
\nSGST Act, 2017
\nSection 171 on Anti-profiteering measures
\nStatutory Provisions
\nAnti-Profiteering Measure (Section 171)
\nThe following is<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n given an opportunity, it is a fact that GST is a new concept being introduced in India for first time and claimed as a major tax reform and that experience suggests that GST may bring in general inflation in the introductory phase. The Government wants that GST should not lead to general inflation and for this, it becomes necessary to ensure that benefits arising out of GST implementation be transferred to customers so that it may not lead to inflation. For this, anti profiteering measures will help check price rise and also put a legal obligation on businesses to pass on the benefit. This will also help in instilling confidence in citizens. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e following monitoring functions : = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n read with the Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations, 2014. Countries like Canada and New Zealand have also similar provisions. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" ANTI PROFITEERING MEASURES IN GSTBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 21-4-2017 The GST law contains a unique provision on anti-profiteering measure as a deterrent for trade and industry to enjoy unjust enrichment in terms of profit arising out of implementation of Goods and Services Tax in India, i.e., anti-profiteering measure … Continue reading “ANTI PROFITEERING MEASURES IN GST”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3284","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/3284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3284"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/3284\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nAnalysis of Anti-Profiteering Measure
\nThis is a new concept being tried out for the first time. The intention is to make it sure that whatever tax benefits are allowed, the benefit of that reaches to the ultimate customers and is not pocketed by trade.
\nThe power has been given to Central Government to constitute an authority to oversee whether <\/p>\n
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\n * Input tax credit availed by taxpayer have actually resulted in commensurate reduction in price of goods \/ services
\n * The reduction in prices on account of reduction in tax rates have actually resulted in a commensurate reduction in price of goods \/ services.
\nAnti profiteering Measures Abroad
\nGlobal experience suggest that anti-profiteering provisions are only effective if there is a significant lead-in time to allow the relevant authority to educate consumers and businesses as to their respective rights and obligations. The concept of anti- profiteering provision has been perhaps borrowed from Australia which was the first country to enact similar provisions when it replaced a series of inefficient taxes with a GST in July, 2000. The Australian Competition and Consumer Commission (ACCC) was charged with the responsibility of monitoring prices 12 months before the commencement of GST. The ACCC's focus was on educating consumers and businesses.<\/p>\n
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\nImplementation of Provision
\nIt is expected that there will be rules or guidelines for implementation of this provision in relation to who will implement this provision, constitution and business rules for authority to monitor, possible cost audit monitoring, from when this provision will be implemented and how authority will check and implement. Also, penalties, to be deterrent will also have to be determined in interest of customers as well as businesses. It will also have to be ensured that there is no hardship, harassment or undue interference by the Authority. At the same time, businesses are expected to be fair and reasonable as otherwise, market forces would lead to fair price determination in absence of any cartelization or unfair trade practice.
\nTo conclude, it can be sa<\/p>\n
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