As we all know from today i.e. July 1, 2017 GST (Goods & Service Tax) came into force. From now on in place of 17 indirect taxes only one tax, that is GST will be levied on supply of goods & services. From the moment when it’s framework laid down govt. is always saying that it is beneficial for everyone as it reduce burden of multiple indirect taxes. But, there is one thing upon which we should think about whether the consumer will get benefit of reduction in tax rates on supply of goods & services or the benefit of input tax credit to the recipients by way of commensurate reduction in prices or not. Generally it would not happen but if such activity happens in future then what one should do?
To protect consumers benefit due to reduction in tax rate on supply of goods & service or the benefit of input tax credit to the recipients by way of commensurate reduction in prices Authority has been set up by the govt. “ named as “Anti Profiteering Authority”. Now the Question is what is Anti Profiteering Authority?
Anti- Profiteering Authority:
This authority is set up to decide penalty on those businesses who do not passes profit of tax rate reduction on supply of goods & services to recipients under GST regime. This authority is formed by the members of GST council, headed by union finance minister Arun Jaitely. This Authority is consist of 5 members, which includes a Chairman (who hole a post of equivalent in rank to a secretary of govt. of India) and 4 Technical Members (who have been commissioners in central excise & service tax either at the centre or state). But the members of this Authority will be finalised by the search cum selection committee formed by govt.
How it will work?
There is a four tier structure of Anti Profiteering Authority. Firstly, if the benefit of reduction in tax rates on supply of goods & services has not been given to the recipient then a written application has to be submitted to the State Level Screening Committee. The work of this committee is to investigate whether the supplier is actually contravene the provision of sec.171 or not, if he is found guilty(that he didn’t pass on the benefit to the consumer) then the application will be forwarded to the Standing Committee (consists of tax officials from the centre & the state), who shall within a period of 2 months from the date of the receipt of the application examine the accuracy & adequacy of the evidences provided in the application in this regard to determine whether there is a prima facie evidence to support the claim of the applicant that the benefit in tax reduction has not been passed on to the applicant. After being satisfied with the evidences, Standing Committee refer the matter to the Director General of Safeguards (Secretary to the Authority) for detailed investigation. After collecting necessary evidence by the director general of safeguards to determine the accuracy of the application & evidences submitted with it. The director General will have a period of 3 months for investigation & submission of its report on the matter. If the report of the Director of General of Safeguard States any anti profiteering practices by the supplier then the following actions may be taken by the Anti-Profiteering Authority:-
Return to the recipient the amount equivalent to the amount which he should get due to reduction in tax rates along with an interest @18%.( This interest will be calculated from the date of collection of higher amount till the date of return of such amount).
If the person is not identifiable from whom the application is received then the same amount will be transferred to consumers fund.
After that penalty will be imposed on the defaulted supplier and its registration will be cancelled.
Author: Rekha sharma, Accounting and Business Statistics HOD at DAV College Ajmer, Rajasthan.
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