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GST: Anti-profiteering authority can deregister firms

We hope we do not have to use the anti-profiteering clause, Jaitley said at the press conference

Indivjal Dhasmana  |  New Delhi 

GST: Anti-profiteering authority can deregister firms

Companies not passing on benefits of reduced prices on account of the proposed (GST) to customers may lose their
 
An that will be set up will have the power to debar an errant assessee from conducting business if he does not pass on lower prices on account of the to customers. 
 
Finance Minister has said the anti-profiteering provisions are not to be used unless the government is forced to do so.
 
The is set to be rolled out on July 1. The authority will cease to exist two years after its constitution.
 
The authority can order a reduction in prices and ask companies to return money to customers. In case customers do not claim their money or are not identifiable, the money will go into a customer welfare fund. The authority can also impose a penalty.
MS Mani of Deloitte said the provision of de-registering a company was “draconian” and added it would be used only against repeat offenders. De-registering an assessee is the last of four actions the authority can take. It has to first tell an assessee to reduce prices, followed by returning money to customers and then imposing a penalty.
 
At a press conference, Jaitley said, “We hope we do not have to use it (the anti-profiteering clause).”

The authority will have a chairman of the rank of a secretary and four nominated members who have been commissioners of central or state taxes. The Council will have the power to constitute a Standing Committee on Anti-profiteering, which will consist of officers of state governments and the central government.

It will also constitute state-level screening committees, which will have one officer of the state government, to be nominated by the commissioner, and one officer of the central government, to be nominated by the chief commissioner.

The additional director general of safeguards will be the secretary to the authority.

It will be up to the authority to determine whether the reduction in the rate of tax on goods or services or the benefit of input tax credit has been passed on by companies and dealers to customers.

The standing committee will, within two months from the receipt of a written application from a complainant, establish whether there is evidence to support the claim. All applications will first be examined by state level screening committees, which will forward them with their recommendations to the standing committee. 

First Published: Tue, June 20 2017. 22:32 IST
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