GST: Firms Face Ban for Not Sending Out GST Benefits to Consumers.

The Government has endangered to cancel the registration of entities that do not pass on gains from GST to consumers.

The cancellation of registration is in addition to the Power to levy penalty that was suggested under the Law.

The Government has repeatedly threatened to invoke Anti-Profiteering provisions to ensure that gains of GST by way of lower taxes & input tax credit for taxes Paid at all stages are Passed on to consumers. At the same time, it also wishes to confirm that in cases where the levy is going up, companies do not take unfair advantage.

The GST Council has approved a 3 stage process with the objections being 1st verified by a standing committee of officers. If the panel finds merit, it will be sent to director general of Safeguards, which will reconnoiter the case. Based on the report, Anti-Profiteering authority will choose on the case. Said by the Council that the rules finalized; the time the complaint is lodged, the whole procedure has to be ended in 8 months.

Tax Practitioners said that cancellation of registration is too unpleasant, given that the rules are too Open-Ended. A consultant said in their current form, the provisions can be misused by Rivals, who can lodge a complaint against a company, which will have to answer queries.

According to a tax consultant with a global firm “The current mechanism is too broad-based & hard to implement. Can you act against an eatery in Mahabalipuram that does not pass on the Gains of Input tax credit? The Focus should be on sectors such as Automobiles, Cement, Steel & Real Estate where malpractices are more common & some have a history of pocketing the gains.

The Government has opted to play it safe with the Anti-Profiteering provisions as Malaysia Saw a price surge in various segments after it announced GST. Australia had successfully used the clause to ensure that consumer interest was protected.

A special event planned with a mega launch of tax regime on the June 30th night at the Historic Central Hall of Parliament

Finance Minister Arun Jaitley said President Pranab Mukherjee would be on the dais with Prime Minister Narendra Modi.

The PM’s Predecessors, Manmohan Singh & HD Deve Gowda, have also been invited for the function, which will see the implementation of GST at midnight.

Former Finance Ministers, State Chief Ministers & Finance Ministers, who have worked on the implementation Process for Years, have also been invited.

On June 19, the center also reported several provisions of the integrated GST act to head for a July 1 launch even as the Jammu & Kashmir government is trying to impulse for a passage of the legislation to join other states in implementing the tax reform.

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