New Delhi: A four-member standing committee, comprising tax officials of the Centre and states, has been set up to receive complaints of undue profiteering by any entity under the new goods and services tax (GST) regime.

The Standing Committee on anti-profiteering will act as a complaint processing machinery and will refer any cases it finds fit for investigation to the Directorate General of Safeguards (DGS). The setting up of the panel, with two officials of the Central Board of Excise and Customs (CBEC) and one each from Delhi and Haryana tax department, sets in motion the anti- profiteering clause under the GST.

CBEC officials Himanshu Gupta, principal commissioner, GST Delhi; O.P. Dadhich, principal commissioner customs (preventive) Delhi; H. Rajesh Prasad commissioner (sales tax) Delhi and Ashima Brar excise and taxation commissioner Haryana, are members of the committee, according to an official order.

The anti-profiteering mechanism was proposed to enable the benefit of lower taxation in the GST with the subsuming of over a dozen central and state taxes like excise duty, service tax and VAT and end to tax-on-tax, is passed on to consumers. Businesses or entities not passing on the benefit can be referred to the committee.

The detailed procedure for approaching the committees will be announced soon, officials said. Revenue secretary Hasmukh Adhia had last week said that the government has notified the ‘standing committee’ comprising four officers—two each from the Centre and states—but the names of the officers were not in public domain.

As per the structure of the anti-profiteering mechanism in the GST regime, complaints which are of local nature would be first sent to the state-level ‘screening committee’, while those of national level would be sent to the ‘standing committee’.

If the complaints have merit, then the respective committees would refer the cases for further investigation to the Directorate General of Safeguards (DGS). The DG Safeguards would generally take about three months to complete the investigation and send the report to the anti-profiteering authority.

Although, the members of the anti-profiteering authority, to be headed by a secretary-level officer with four joint secretary-rank officers as members, are yet to be finalised, Adhia had said adding that the authority would be in place by the time the DGS investigation on the complaints is complete.

The GST was rolled out from 1 July and the government has advised businesses to pass on the benefit of any cost reduction to buyers. The anti profiteering authority, if it finds that a company has not passed on GST benefits, will either direct the firm to pass on benefits to consumers or if the beneficiary cannot be identified will ask the firm to transfer the amount to a ‘consumer welfare fund’ within a specified timeline.

The authority will have the power to cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes under the GST regime, but it would probably be the last step against any violator. The authority can suggest return of the undue profit earned from not passing on the reduction in incidence of tax to consumers along with 18% interest, as also impose a penalty.

A five-member committee headed by cabinet secretary P.K. Sinha, comprising Adhia, CBEC chairman Vanaja Sarna and chief secretaries from two states, would finalise the Chairman and members of the authority, which would have a term of two years.

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