Proposal to encourage taxmen to file GST profiteering complaints

The GST officials are working out mechanism to prompt taxmen to initiate profiteering complaints, which could be taken up for further investigation by the Directorate General of Anti-Profiteering.

Currently, only consumers file complaints against businesses for not passing on the benefits of reduction of the rates of Goods and Services Tax (GST) on various products.

Under the standard operating procedure (SoP) being worked out by the GST officials, the Central and state government tax officers will be encouraged to take up suo moto the issue of profiteering by businesses, sources said.

Once the tax officers find that GST benefits have not been passed on to the consumers, they will refer the case for further investigation to the Directorate General of Anti-Profiteering (DGAP).

As per the procedure, the DGAP submits its investigation report to the National Anti-Profiteering Authority (NAA), which decide on the final quantum of profiteering and the monetary penalty.

In 2018, the NAA received 80 investigation reports from the DGAP and issued final orders in 29 cases. Of this, 9 businesses were found to have not passed on benefits of rate cuts of about ₹559.90 crore to consumers.

So far in 2019, the NAA has passed orders in 3 cases.

Sources said as consumers often are reluctant to file complaints, the GST officials and the NAA are keen to rope in the field formation for filing complaints of profiteering against businesses.

Sources further noted that consumers usually lag the expertise to ascertain whether the GST rate cut benefits have been passed on to them by way of reduction in prices. The tax officials, they said, will be able to find out with greater certainty, whether the tax cut benefits have been passed on to the consumers.

The proposed mechanism will also act as a deterrent for businesses who show reluctance in passing on GST benefits.

The GST has replaced a tangle of local taxes and entry levies. Since its roll out on July 1, 2017, GST Council has reduced tax rates on a host of items.

Of the 1,216 commodities being used at present, broadly 183 are taxed at zero rate, 308 at 5 per cent, 178 at 12 per cent, 517 at 18 per cent and 28 items in the 28 per cent slab.