Agency.GST Council may take step towards setting up an anti-profiteering mechanism or rope in an existing body to protect the interests of consumers from business entities under the Goods and Services Tax (GST) regime. The proposal is to establis Quasi-judicial authority to prevent business entities from making undue profit in post-GST scenario.
The model draft GST law, unveiled in November last year, had come up with the proposal to create an anti-profiteering mechanism so as to ensure that benefits of lower taxes is passed on to the consumers.
A senior finance ministry official stated GST is one- nation-one-tax. It will lead to doing away with current system of tax-on-tax and any reduction in tax rate will have to be passed down to consumer.
In existing set-up,central excise is levied on a produce manufactured at a factory.When it is sold,a VAT is levied on not the ex-factory price but on the rate arrived at after including the cost of manufacture and excise duty.With GST, this practice will be a thing of the past.