The anti-profiteering watchdog may get an extension beyond its original two-year mandate as the Government thinks that it needs to function for a longer period in light of the frequent rate changes in the current GST regime and the unfinished task of bringing petroleum products under the new indirect tax regime.
Policy makers believe that the benefit of tax rate cuts on 178 items from 28% to 18% announced last November in one of the biggest rounds of tax rate reductions in the GST regime have not been fully passed on to consumers. This has forced the NAA to step up efforts, which include asking tax officials in the field to make sure businesses make suitable price revisions and pass on tax cut benefits to buyers at the beginning of the supply chain itself, rather than waiting for the end consumer to file complaints.
“NAA was established to address profiteering concerns during the (two-year) GST transition period. It was believed that market competition would ensure that businesses pass on benefits of tax reduction to consumers. But experience so far shows that regulatory force is needed to achieve that goal,” a finance ministry official said on condition of anonymity.
The GST rate of several goods has been changed after the GST- trollout in July 2017.
The anti-profiteering authority was formed for two- years post- GST to ensure that the benefit of rate reduction is passed on to the consumers. The two-year term is specified in the anti- profiteering rules.
Since July 2017, tax rates of 384 goods and 68 services have been cut, leading to a revenue loss of more than ₹70,000 crore to the exchequer.
The eventual aim of the government is to bring down the number of slabs under indirect tax structure from five to three and to do away with the 28% slab or make it as lean as possible.
