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GST: Fin Min warns industry against hiking prices arbitrarily

Press Trust of India  |  Srinagar 

With companies indicating a possible rise in prices on the Goods and Services rollout from July 1, the ministry today warned Inc against raising rates arbitrarily in anticipation of the

The department may invoke the anti-profiteering clause after the mechanism is put in place and may look into balance sheet of companies if they have gained from the and whether the benefits have been passed on to consumers.

"The machinery for the anti-profiteering authority may not be ready at present but any change in prices will be called into questioned," Secretary Hasmukh Adhia said, adding that any fluctuations in prices will be closely monitored.

The Council in its two-day meet finalised the rates for goods and services, giving companies adequate time to work out their pricing policies.

Adhia said the will soon begin work on setting up an anti-profiteering agency, as proposed in the GST and the department may even initiate suo motu action against firms.

"We expect companies to cooperate. We hope we don't have to use the weapon (of anti-profiteering authority)," he said.

The GST Act includes the provision of setting up an anti-profiteering authority to ensure that companies pass on the benefit of tax reduction to customers.

The has fitted the goods and services in tax brackets of 5, 12, 18 and 28 per cent.

Adhia said that despite the higher standard rate of 18 per cent, service providers will get input tax credit that will lower the effective incidence of the GST to around the current incidence of 15 per cent.

The tax department feels tax cut benefits should be passed on to consumers through more transparent billing.

Several analysts have opined that consumers may have to bear the brunt of the higher tax.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 19 2017. 21:48 IST
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