New Delhi – Anti profiteering clauses would emerge out soon enough according to GST sources. Later in this week, the GST Council will sit for a discussion about the anti profiteering mechanism of an anti-profiteering clause.
This provision might bring smiles to many faces as it would protect the interests of the consumers. Arun Jaitley, the finance minister of the country, declared this in a discussion that was held on Tuesday.
GST Council is considered to be an influential panel as it comprises the finance minister himself would meet for a discussion on 5th August. The meeting would evaluate and take stock of the GST implementation that has been introduced on 1st of July. The clause which would be added says that the businesses would have to pass on their benefits that arise from the lower tax to the consumers.
If the section 171 of the GST Act is to be implemented, then the companies would have to pass the benefits of the tax reduction to the consumers as a corresponding price reduction. When faced with the question regarding the impact of GST on the prices, Arun Jaitley informed that the manufacturers would have to pass on their profit or the benefits that they get from the price reduction to the consumers.
For this, he brought the examples of the automobile industry. Jaitley said that like automobile industry which has reduced the price, the other industry would do the same to put up with the tax reduction. He has assured that in a few days the powerhouse of GST would sit together for a discussion. He said that to finalize the mechanism, the council would not need long hours.
He added that one has to make an example for others to motivate them. Once the standard is set, others usually follow. If manufacturers get a benefit of input of tax, then there must be cost reduction, says Jaitley. Industry, however, has the initial resistance to this clause, add the Council officials.