The GST authorities noticed that the decrease in the GST rates has not extended any significant advantages from the traders of fast moving consumer goods (FMCG) and pharmaceuticals to consumers, and this led to the GST authorities to keep an eagle eye on home appliances or white goods manufacturers.
The government has slashed GST rates on Washing machines, TVs and other electronic products but it seems futile for the consumers because they are not getting full-fledge benefit of it, due to which the anti-profit authority has started putting efforts to delve into the matter more deliberately to see if the companies are engaged in fueling their bank accounts on names of customers. And this investigation has already captured & issued a notice to the Kolkata based IFB NSE 1.79 % Appliances, a BSE-listed maker of high-end washing machines and various other consumable product.
Two people with direct knowledge of the matter said that this is the first company to receive the notice to issue minutiae of cost and selling prices on its washing machines a few months ago.
But the first letter kept unresponded by the company and so this led to the delivery of the second letter by the NAA (National Anti-profiteering Authority) to furnish the details of approx cost and selling prices of products before and after GST.
An email was also sent to IFB on Saturday but again it remained unanswered which may result in the charging of fines on IFB later.
NAA has taken other companies as well into the consideration and soon the letters will also be deported to them to furnish the details about the product’s cost price and selling price. According to the Industry trackers, NAA’s is primarily focusing on goods that boost inflation as the global implementation of GST consequences elevated inflation.
“The anti-profiteering authority is scrutinizing every sector that directly impacts inflation and so white goods companies are currently under the lens. However, the question remains that in the absence of any prescribed methodology, it becomes really difficult for a company to compute the quantum of profiteering and pass on the GST rate cut benefits,” told by Abhishek A Rastogi, the partner at Khaitan & Co.
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Most of the consumer durable companies have different individual contracts with different retail outlets which in turn complicates the calculation of the difference in price after and prior GST regime.
This investigation seems to bring good news for the consumers as very soon the consumers good manufacturing companies will start refraining from these kinds of practices due to the notices sent to them and fines charged on this. And in this way inflation will be controlled, benefiting the consumers.
