The central and state tax officials have decided to check the profiteering is being done by the retailers and manufacturers or not i.e. they wanted to see whether the benefits of GST cut downs are been given to the customers or not. And for this, the officials will turn in to the customers and will present themselves in front of the retailers and manufacturers.
How will the Officials Check the Profiteering?
The NAA (National Anti-profiteering Authority) has given the orders to the field officers to purchase something from the market under the provision in the CGST (Central Goods and Services Tax) and then cancel the transaction. After cancellation, use the generated invoice for further investigation and check where the profiteering is being observed.
What is Being Done to Bring Down the Profiteering?
By doing this, the NAA will get to know who is using the profiteering and how it is being beneficial to the industry and trade. This is done because the central and state government has made several sacrifices in terms of their revenue after the introduction of GST in July 2017.
The NAA along with its field officers of state and the central government is doing workshops in various cities so that the compliance with anti-profiting provisions can be improved. Till now the workshop has been held in Indore, Kolkata, Bhubaneshwar, and Bangalore. The field officers have been given the strict message to examine the tax rate deductions by themselves instead of waiting for a complaint from the customer.
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An anonymous man said “The CGST Act gives powers to commissioners to get an officer purchase any product or service to check the invoice and then get the price refunded on return of the item. The cancelled invoice is sufficient to initiate action if any profiteering is noticed. Action against profiteering need not be complaint-driven”.
Profiteering
In terms of GST, profiteering means that the benefits which must be given to the customers are not being passed i.e. benefits of rebates or deduction of tax. It is not enough for businesses to show that they have not kept any profit for themselves because it can also mean that there is a reduction in prices compared to tax deductions on some items and fewer on some others.
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Anti-Profiteering
Anti-profiteering is just opposite of profiteering. Anti-profiteering means that the benefits given by the government have been passed to the customers. Therefore, the traders and businessmen have to ensure that every individual item affected by the change in tax has been cut down to take corrective measures.
It certainly offers some administrative and logistical challenges for those businesses that have long supply chains and multiple product portfolios. A person having the knowledge of the anti-profiteering said: “Anti-profiteering is a new, evolving law”. Officials believe that the law is not correct but insists the businesses to establish systems to communicate immediately with all their partners in the value chain to make sure about the quick transmission of tax deduction.
