After the successful rollout of the much awaited Goods and Services Tax (GST), the GST Council, at its next meeting will finalise a mechanism to operationalise anti-profiteering clause which seeks to protect consumers interest. The anti-profiteering law simply states that the businesses have to pass on the benefits arising out of lower taxes to the consumer.
As per Clause 171 of GST Act, it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices. Finance Minister Arun Jaitley, referring to concerns raised by members with regard to impact of GST on prices, said it would be mandatory for manufacturers to pass on the benefits of reduction in taxes to consumers.
The minister hoped that the decision of price cut by automobile sector on account of benefit of input tax credit would be followed by others manufacturers. He further said that after taking into account input tax credit, weighted average tax is less than what it was on June 30. He added that it will also help in increasing the tax base and enhancing resources for the government for states as well as central government. The all powerful GST Council comprising state finance minister will meet on August 5 to take stock of implementation of GST which was rolled from July 1.
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