New Delhi: Finance minister Arun Jaitley on Saturday warned that businesses not passing on the benefits of tax cuts and rebates to consumers will have to brace for withdrawal of tax benefits.
Jaitley reminded businesses of the National Anti-profiteering Authority (NAA), which he described as more than active. “Of course, businesses have to pass on the benefits to consumers. Or we will do what we did in the case of restaurants.”
In November 2017, the GST Council reduced the tax rate to 5% for all restaurants from 12% for non-AC and 18% for AC restaurants. The tax cut was accompanied by withdrawal of input tax credits. The tax credits were withdrawn after widespread complaints about eateries overcharging consumers by not passing on the benefits. Restaurants in five-star hotels are still in the 18% slab with tax credits.
“If you do not pass on the benefits of tax credits, you lose them, “ the minister said during a briefing after the 31st meeting of the Goods and Services Tax (GST) Council here.
Recently, the NAA has witnessed a surge in complaints relating to overcharging by fast-moving consumer goods (FMCG) companies on items such as handwashes, deodorants, scented oils and cosmetics.