A fine balance

A fine balance

Context

• The GST’s anti-profiteering body must not become a tool of harassment

About the National Anti-Profiteering Authority

• The National Anti-Profiteering Authority is empowered to crack down on firms that fail to pass on the ‘benefits’ of the tax regime to consumers.
• The authority can order businesses to reduce product prices or refund to consumers ‘undue benefits’; in extreme cases it can impose a penalty on errant firms and cancel their registration as taxpayers.

Why is it important?

• The trigger for setting up the authority is clearly the recent large-scale reduction in tax rates on more than 300 items, of which about 200 rate changes were to come recently
• The government is keen on ensuring that consumers have a better perception of the GST’s ground-level impact.
• While wholesalers can still implement this, reaching every last retailer is a challenge.
• Firms have been warned that the entire retail chain must reflect revised prices in order to avoid anti-profiteering action

What is the way ahead?

• The government must ensure that the authority’s powers are used transparently and only where there is genuine consumer/public interest at stake. Else, it runs the risk of making profit itself a bad word.