Chandigarh/ Kashav Garg: Post 6 months of GST implementation and reduction in tax rates, Anti-profiteering measures as defined by section 171 of the CGST Act has become a concern for traders and the consumers. We need to understand the concept in the right perspective. At the very outset, the intent of the anti-profiteering clause is not to bring inspector raj back rather it is to ensure that the tax benefit is passed on to the consumers. The implementation of section 144 of CrPc Act (in some states and UTs) is totally uncalled for since it will instill fear in the minds of the traders.
The consumer should differentiate between discounts offered and the passing of the tax benefit to him. It is not always necessary that wherever there is a difference in price, the trader has not passed on the tax benefit. It might be a result of extra discount given to the consumer. Discounts are the only cases where the trader can sell his goods lower printed MRP. It is the duty of the manufacturers to issue instructions and orders to its dealers for the reduction in prices and ensure that new MRP is printed on their products. Until the time MRP is not replaced by the manufacturer himself, the trader cannot be held liable.
As far as the anti-profiteering clause is concerned, the standing committee formed under the Act has the authority to examine such concerns. For UT Chandigarh, a committee as constituted includes the members of both UTGST and CGST. Any complaint regarding anti-profiteering should be referred to such committee and based upon their examination, the case may be further referred to Director General of Safeguards (DGS). SDM has no authority under GST act to conduct such roving queries. Even after 6 months of GST, there is no mechanism in order to decide whether commensurate price reduction has been made by the taxpayer or not. Before any complaints are acted upon, it is necessary that such mechanism should be worked out. Even if Chandigarh Administration wish to control the traders, it is necessary that proper channel is followed.
Where the case is referred to DGS, it grants an opportunity to the taxpayer by providing him with the complete details of the complaint along with all the pieces of evidence. Where it is found that the reply is unsatisfactory, the action may be taken against the taxpayer. Rule 11 specifically provides for confidentiality clause i.e. the details of all anti-profiteering complaints shall be kept confidential. Moreover, the details of the investigation cannot be called for even under the Right to Information Act. We need to understand that until the time matter is decided by DGS, no disclosures can be made to the public at large. This might hamper the business of the taxpayer.
As a Chartered Accountant, I feel that Anti-profiteering should become a win-win situation for all the stakeholders. We should try to implement it in right perspective rather than instilling fear in the minds of the taxpayers. We should carry new mindsets to understand the new & dynamic law.