CII calls for clarity in GST rules to curb price hike: Assocham
There is concern about practical and procedural challenges emerging during the initial implementation period of the anti-profiteering clause under the GST, which was rolled out last July.business Updated: Jan 07, 2018 11:42 IST
Noting that the Goods and Services Tax (GST) anti-profiteering clause could lead to hardship, industry chamber Assocham said on Sunday that there should be more clarity in rules to curb price hike arising from a rollout of the new indirect tax regime, saying tax authorities will need to be more sensitive to avoid undue harassment of assessees.
The industry body said in a statement that there is concern about practical and procedural challenges emerging during the initial implementation period of the anti-profiteering clause under the GST, which was rolled out last July.
“With the National Anti-Profiteering Authority being established, the Confederation of Indian Industry (CII) has called for greater clarity in rules to curb price increase arising from GST,” it said.
“Practical implementation of the regulations without ambiguity and without untoward scrutiny is required, particularly in the initial days of implementation till the system stabilizes.”
Noting that the anti-profiteering clause was brought in to keep a check on unethical high profits, analyse long-term effects of GST, control price rise and retain consumer trust in the new tax regime, Assocham said the relevant rules say “benefit of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices”.
“However, as this definition is not clear, discretionary bias may creep in,” the statement said.
CII noted that several factors contribute to pricing decisions, such as supply and demand conditions, as well as suppliers’ costs and taxes.
“The anti-profiteering clause of GST law should provide clarity on rules and regulations regarding assessment of valuation and impact of taxes,” it said.
“Tax authorities will need to be sensitive to natural business outcomes and avoid undue harassment. Also, the clause gives relatively less time for adoption of the new provisions. Manufacturers or suppliers may also deal in several products that are not distinguished in their accounting books, so that determining price margins for individual products will be difficult.
“Effective anti-profiteering provisions that are clear are needed to ensure GST provides tax benefits to consumers,” the statement added.
First Published: Jan 07, 2018 11:41 IST