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Filing complaints against companies for not passing the benefits of tax reduction under the goods and services tax (GST) regime is expected to become simpler. The government is looking at simplifying the anti-profiteering application complaint form to allow the public to file profiteering complaints against firms. The chairman of the anti-profiteering authority, B N Sharma, has asked the standing committee, part of the anti-profiteering mechanism, to suggest a simplified version of the form. “We understand the current application form is a little complicated for a layman. We are in the process of simplifying it. The standing committee is looking into the matter. Meanwhile, people can take help of tax authorities to file a complaint,” Sharma told Business Standard. The current format of the complaint form requires detailed information such as sale price, taxes (both before and after GST), benefits of input credits, etc, making it tough for a common man to file a complaint. Besides, one is required to fill in details such as GST identification number of the company and the six-digit harmonised system of nomenclature (HSN) code of the products. A separate application needs to be filed for each good or service for which anti-profiteering is alleged, making the process tedious.
The anti-profiteering authority has so far received 169 complaints alleging that suppliers of goods or services have not passed on the GST benefits to customers. Director General of Safeguards, the investigative arm of the department of revenue, has sent out notices to Pyramid Infratech, Honda Motor Vehicles, Lifestyle International and Hardcastle Restaurants (the master franchisee of McDonald’s) for not passing on the benefit of the GST to the final consumer. It has asked these firms to provide their balance sheets, trial balance and profit and loss accounts for the past one year. The anti-profiteering mechanism is a three-stage process — state-level screening committee for local complaints and a standing committee for national-level complaints; investigation by the Directorate General of Safeguards, and a probe by the decision-making body, the the National Anti-Profiteering Authority. Pratik Jain of PwC India said there was certainly a need to simplify the form for consumers. “Once a prima facie case is established, the details can then be sought from the business concerned. The entire methodology of conducting the investigation needs to be relooked, including the information being sought from the businesses.” According to the rules, “Benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.” The Confederation of Indian Industry (CII) has argued that this definition was not clear and that discretionary bias might creep in. “The rules say benefit of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices. However, as this definition is not clear, discretionary bias may creep in,” a PTI report quoting CII said. It pressed for clear guidelines on anti-profiteering for the industry as it could lead to hardship for smaller players. “Another challenge is complicated compliance. The government would need to compare the cost of every product before and after GST to determine the amount of tax benefit applicable. Manufacturers or suppliers may also deal in several products that are not distinguished in their accounting books, so that determining price margins for individual products will be difficult,” CII says. “Tax authorities will need to be sensitive to natural business outcomes and avoid undue harassment. Also, the clause gives relatively less time for preparation and adoption of the new provisions.” Bipin Sapra of EY said: “While simplification of the complaint form would make it easy to file complaints for the common man, it is important for the government to do preliminary verification before initiating an inquiry to avoid undue hardship to industry.”