Tax Department officials continuously keeping an eye on the prices of goods and services after the implementation of the new indirect tax regime in the country. Manufacturers of consumer goods, mobile handset companies, and food chain restaurants have received the call from tax authorities department to provide invoice details before and after GST.
Local Tax Authorities sends notice to the company in Tamil Nadu, stated that “In order to study prices under the GST, you are requested to send selling price of your top commodity… in the relevant format”. Companies in Maharastra, Puducherry and Andhra Pradesh have also informed with the similar notice. A person having known source said that some of the companies have been informed through the telephone. Malaysia and Australia had made a mechanism so that prices did not increase even after the implementation of GST.
In fact, after the implementation of GST Regime, some of the countries were affected by the inflation and the government wants to prevent such kind of situation. India has adopted two options to avoid such kind of situation- the first one is anti- profiteering provision and the second one is a multi- rate GST structure.
The government ensured that almost all the items should be covered in the GST slabs with lowered tax structure for the intention to keep the prices low. The industry also feared that anti profiteering clause may have arisen through this notice procedures. The GST Council has framed four tier structure in the new indirect tax system- 5 percent, 8 percent, 12 percent and 28 percent.
The government said that the main aim of implementing an anti-profiteering provision in the new regime is to ensure that no one should earn profits from illegal means. The government anticipates that in the new regime the industry must provide the benefits to consumers due to the reduction in prices of goods under the GST. According to the anti-profiteering provision, if in a case industry and any business entity does not provide the tax relaxation benefits to consumers in the new indirect tax regime, then either the legal action would be taken against them or license would be cancelled
Pratik Jain Leader of Indirect Taxes at PwC said, “These random enquiries by the authorities are not in line with the rules notified and lead to avoidable paperwork for companies at the time when they are trying to settle in the new tax regime.” He further added that “GST Council should take a note of this and issue appropriate guidelines.”
