Legality of GST’s anti-profiteering provision4 min read 27 Feb 2018, 12:16 AM IST
Price regulation of goods and services under GST is unprecedented and unconstitutional
Of the many things that make this central government far from “minimum" in its pursuit of governance, the “anti-profiteering" mechanism contemplated under Section 171 of the Central Goods and Services Tax Act (CGST Act, 2017) has got to be the most statist. It is the first law in our constitutional history that allows the government to keep a tab on a businessman’s pricing decision irrespective of his intentions, the nature of the produce and market circumstances. There have been laws to regulate under-invoicing, pricing during emergencies, pricing of essential or special commodities, unfair and manipulative trade practices, etc. But Section 171 says that “any reduction in rate of tax...or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices."