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Photo: Mint
Photo: Mint

Anti-profiteering body steps up GST compliance drive

  • About 40 orders may be issued shortly on complaints against firms across sectors
  • Authorities intend to take more measures to reach out to consumers and sensitise them about their rights and remedies

NEW DELHI : A wave of orders is expected from the National Anti-profiteering Authority (NAA) in the next three months, with the Centre stepping up a goods and services tax (GST) compliance drive.

About 40 orders are expected to be issued shortly on complaints against firms in the real estate, consumer goods, and cinema industries, said a person with direct knowledge of the matter, who requested anonymity.

The firms facing investigations include some the leading suppliers of ayurvedic products, electronics and television makers, luggage and travel accessories makers, two leading multiplex chains, and hygiene and home products firms, said a second person aware of the matter.

This comes amid concern among policy makers that businesses have pocketed part of the 1 trillion worth of GST rate cuts that was to benefit end users and thus help stimulate demand in the economy.

In the past, about 60% of the cases investigated by the Directorate General of Anti-Profiteering (DGAP) have confirmed profiteering behaviour by businesses. The NAA has issued orders on more than 100 cases since it came into force in November 2017. Its orders have led to businesses depositing about 600 crore in profiteered amount to a consumer welfare fund managed by the consumer affairs ministry, said the first person mentioned above.

Authorities intend to take more measures to reach out to consumers and sensitise them about their rights and remedies. Towards this, the government has decided to direct erring companies to deposit the profiteered amounts in a separate fund to be used for GST-related purposes.

“While some of the large brands have started passing on the GST rate reduction benefits, several others, especially the mid-sized ones, have not revised maximum retail price downwards and, hence, only one in three consumers have validated the reduction in MRPs," said Sachin Taparia, founder and chairman of LocalCircles, an online community of consumers. Their survey last month covering more than 14,000 citizens showed that a large section of customers believe they are not getting the benefits of the tax cuts that came into force on 1 January 2019.

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