The National Anti-Profiteering Authority (NAA) has directed GST officials across the country to ensure that the tax rate cuts notified on some COVID-19-related essentials are passed on to consumers.
Complaints from end users about lack of price reductions commensurate with the tax cuts, are to be treated on a priority basis and forwarded to the State-level Screening Committees and Standing Committees on Anti-Profiteering, the NAA Secretary A.K. Goel said in a memo posted on its website on Thursday.
At its last meeting on June 12, the GST Council had waived the indirect tax levied on two critical drugs, Tocilizumab and Amphotericin B, and reset the tax rate to 5% on 14 COVID-19 essentials. On June 14, the Finance Ministry had notified the revised rates, which are applicable till September 30.
“The suppliers are required to commensurately reduce the prices of each of the supplies of Goods and Services made by them so that the benefit of the reduction in tax rates and/or of input tax credits is passed on to the recipients/consumers,” the NAA emphasised.
Tax experts said that producers of items ranging from ambulances to pulse oximeters and oxygen concentrators would need to ensure retail price reductions were effected soon and paperwork filed to justify the extent of reductions, in order to avoid action under the anti-profiteering framework.
“Businesses dealing with medical supplies that have undergone a GST rate reduction need to ensure that they have adequate documentation to demonstrate that the rate cuts have been passed on to the consumers,” said M.S. Mani, senior director at Deloitte India.
Suppliers or firms who had not got the benefit of input tax credits on account of cuts in the GST rate could also file complaints, with the anti-profiteering apparatus.
State-level screening and standing committees examine complaints and determine the prima facie evidence, based on which they are authorised to transfer the case to the Director General of Safeguards at the NAA, if they believe suitable price cuts have not been implemented by a producer.
“The government should give wider publicity to educate consumers of their rights against companies who are not passing on the benefit of reduction in GST rates on COVID items,” said Rajat Bose, partner at Shardul Amarchand Mangaldas & Co.
