Businesses should not profiteer by retaining goods and services tax (GST) relief meant for the consumer, but any corporate response to a minor tax cut should be viewed in the current context of a much bigger economic devastation before labelling it as profiteering behaviour, said Uday Shankar, president of industry body Federation if India Chambers of Commerce and (Ficci).
Shankar said in an interview on 23 December that the industry body’s members are bound by the law of the land and it expects them to pass on any benefit of GST reduction to consumers. There is no sector of the industry that has not been devastated and every business has struggled to survive, Shankar said. If there is a reduction (in GST rate), people should abide by the rules that we all have signed up for. There is no question about that and, if there is any deviant behaviour, we need to come down on it very strongly. However, you also have to understand that if there is a little bit of reduction here and there in tax when it comes in the wake of a much bigger devastation of the larger economic process, it is very tough to call that behaviour as profiteering, he said. These observations come in the wake of a series of orders by the National Anti-profiteering Authority (NAA) holding leading businesses guilty of profiteering for not passing on the benefit of GST relief to consumers.
National Anti-profiteering Authority does not accept an increase in input cost as justification for denying the benefit of a GST rate cut to consumers, but once the price is reworked to reflect the tax rate cut, there is no lock-in period for the new price. Shankar also said industry members were responsible for complying with the laws. Everybody is bound by the laws of the land. If there is a commitment that a certain duty reduction will get passed on, we expect our members to do that, he said.
Courtesyg: Google (photo)
