The National Anti-Profiteering Authority (NAA) has urged GST authorities to lower tax rates on Covid-related items for the customers.
NAA stated that suppliers are obligated to drop the prices of each of their goods and services in proportion to the reduction in tax rates and input tax credits. So that the benefits of lower tax rates and input tax credits be passed on to consumers.
It further requested that GST officials “take all reasonable steps to envisage the GST laws.”
“I have also been directed to recommend that you take up the complaints lodged by ordinary consumers as a matter of priority and forward them to the anti-profiteering apparatus,” the official document stated.
According to Section 171 of the CGST Act, 2017, suppliers of goods and services must pass on the advantage of any tax rate decrease or input tax credit to recipients by a proportionate reduction in pricing.
‘Profiteering’ is the deliberate act of not passing on the mentioned benefits to the recipients in the manner prescribed. “Businesses dealing with medical goods that have undergone a GST rate reduction need to ensure having enough paperwork to indicate that the rate decreases have been passed on to the consumers,” said M.S Mani, Senior Director, Deloitte India.
The NAA’s office order is a step in the right path according to Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co.
“The government should give wide publicity to Section 171 of the CGST Act and educate the consumers of their rights against companies who are not passing on the benefit of reduction in GST rates on Covid items,” Bose said.
In response to calls for lower taxes on commodities and drugs used in Covid-19 therapy, the GST Council decided on June 12 to reduce the tax rates on various Covid-relief items from 12-18% to 5%, while leaving the much-discussed vaccine tax rate fixed at 5%.
