Panel of officers to decide on GST profiteering regulation

This is expected to allay concerns about the future of the anti-profiteering regime under the GST if the date of the GST Council meeting is not finalised. The council had earlier asked the Center to explore transfer of pending and future anti-profiteering cases to anti-trust regulator, Competition Commission of India (CCI), after the tenure of the National Anti-Profiteering Authority (NAA) ends in November. ,

The GST Council has not called any meeting before this. The panel of officers is being considered for immediate decision-making between the two meetings of the GST Council.

However, there are administrative issues that need to be resolved for the merger of the probe wing of the two regulators and transfer of cases from the NAA to the CCI. One of these is that the regulatory framework is yet to be finalized so that the mandate of the two regulators can be fulfilled under one roof, the person said, requesting anonymity.

CCI ensures that market forces operate smoothly and corrects stiff competition by corporate conduct so that consumers can benefit from well-functioning markets. It seeks to prevent practices that hinder competition to promote competition and ensure freedom of trade. This will help consumers with access, choice and price control, but the CCI does not engage in price regulation. However, the mandate of the NAA is to ensure that businesses benefit from reduction in tax rates and availability of input tax credits to consumers, including pricing and cost of production. Responsibilities vary. Besides, manpower and infrastructure requirements should be approved for CCI to take additional mandate, a second person also sought anonymity.

Since CCI chairman Ashok Kumar Gupta stepped down after a four-year term, the regulator faces a quorum shortfall, while the law allows adjudication to a maximum of six members.

The anti-profiteering regime sought to prevent businesses from receiving tax benefits for consumers during the transition to the GST regime in 2017, but its constitutionality has been challenged in courts.

business has returned According to official estimates on regulatory action under the indirect tax regime, 510 crore reportedly profited from consumers, and may have to refund large amounts to consumers, Mint reported on October 10.

Businesses and tax professionals argued that in the absence of guidelines for individual sectors, it is very difficult to accurately estimate the amount of benefit from tax deductions to be passed on to consumers. CCI will require experts in indirect taxation to discharge the mandate of anti-profiteering.

The government has extended the tenure of NAA twice before. One of the major concerns of policy makers is profiteering in the real estate sector. Since several projects are getting delayed, there are concerns that developers are not passing on the benefits of input tax credit since the rules came into force in 2017. Therefore, it will be important to continue regulatory oversight after November, another person said.

An email query to a Finance Ministry spokesperson on November 1 and seeking comments for the story on Thursday remained unanswered at the time of publication.

Given that in a free market economy, the government has little role in deciding prices, except for those items that are price regulated under the Essential Commodities Act, ensuring that businesses benefit from tax relief to consumers. have to give, there are some limits.

Once the price of a commodity, including taxes, is reduced by a business due to a reduction in the tax rate or the availability of a tax credit, there is no lock-in period for the reduced price and the business will reduce the base price of the product. are free to increase. or service thereafter.

The government is not in a position to question this. Also, there is no ecosystem for random sample collection from the market by the authorities to check whether businesses are passing on tax benefits to consumers. Consumer awareness plays a major role in implementing the anti-profiteering provision.