Nirmala allays India Inc's fears on GST Act's anti-profiteering clause
Commerce Minister Nirmala Sitharaman on Friday sought to allay industry concerns over the anti-profiteering clause in the GST law, saying there is nothing to fear if benefits of reduced tax rates are passed on duly to consumers.
In order to ensure that businesses pass on the benefits of tax rate reduction under the new indirect tax regime, the Central GST Act provides for an anti-profiteering section.
As per the rules, a five-member National Anti- Profiteering Authority will be set up, which will have the powers to order reduction in price commensurate with the lowering of incidence of taxation under the new indirect tax regime.
The proposed anti-profiteering authority can cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes.
"I would want to allay that fear (of industry). Every concession or reduction in the rates, we want that to be passed on to the end consumers...This objective has to be served by those who are dealing with the matter and if you dealt with it, there is nothing to be worried about it," she said at an Aaj Tak Conclave on GST. She said there were times in India before GST that many of the incentives and subsidies were never passed on to the end consumers and there are very clear violations.
"So, there is a need for us to have a provision to question why it (benefits) has not reached to the consumers," the minister added.
When asked about the opposition political parties boycotting the mid-night launch programme, Sitharaman said this is a moment of happiness and pride.
"It should be some sense of ownership for all of us. Its no festivity only for me, it is not my diwali versus your diwali. This is a gigantic and historic step...so where is the politics in this," she added.
Further, she added that the industry should not be concerned about the compliance issues of GST as everything would be online. Replying on the protest by the textiles industry, the minister said textiles players in South India are very excited about the new tax regime.
Meanwhile, Niti Aayog member Bibek Debroy on Friday said any suggestion that the Goods and Services Tax will boost GDP growth by 1-1.5 per cent is "utter rubbish", terming it as an "imperfect GST" following changes from the originally proposed "ideal" structure. The noted economist, however, quickly added that he will not "contradict" Finance Minister Arun Jaitley and Revenue Secretary Hasmukh Adhia, when pointed out that they have been maintaining a similar boost to the GDP from the GST regime.
Debroy also said the number of countries with GST is not more than six or seven, even as some "rubbish" figures of about 140-160 countries having GST are floating around.
The Niti Aayog is a government think-tank mandated to advise on policy matters.
Debroy said the Indian GST is not an "ideal" one because of the country's federal structure while a multiple rate structure was also a problem to the new tax.
"When you see figures floating around, there will be 1- 1.5 per cent increase in GDP after implementation of GST. For God's sake, that is utter rubbish," Debroy said while speaking at a session during the GST Conclave organised by Hindi news channel Aaj Tak.
"For an imperfect GST, I have no idea what is the figure.
It might be even more, it might be less, but this particular figure (1.5 per cent) was for ideal GST," he said. "That figure was based on the model that the NCAER did in the course of the 13th Finance Commission report for an ideal GST. We are nowhere near that ideal GST, this is just the beginning of a process," Debroy said.
Massive last-minute stock clearances by durables retailers
Hours before the implementation of landmark GST, many white goods stores in the capital are on an overdrive mode, offering huge discounts of up to 40 per cent to get rid of inventory.
While many bargain hunters walked away with dream deals, some returned empty handed as many stores put up "out of stock" signs for high demand items such as LED television of popular brands such as Sony and LG.
A multi-brand retailer in West Delhi's Rajouri Garden said Sony and LG televisions are not available and there is no certainty as to when these will be available.
Similarly, a store owner at Khanpur in South Delhi said: "We don't have TVs available now they are all sold. However, there is a discount up to 40 per cent on microwaves, washing machines and air conditioners".
Likewise, a dealer at MG Road in South Delhi said even in air conditioners, stocks of brands such as LG and Samsung are have already exhausted.
There's, however, a discount of Rs 3,000 and above on other AC brand like LLOYD, and washing machines of Godrej is being sold at Rs 12,000, the dealer said.
The landmark GST, which will replace more than a dozen central and state levies will be effective from midnight tonight.
GSTN launches Excel template
GST Network on Friday launched an offline Excel-based format for traders and businesses to upload sales data on the GST portal. The Excel template, comprising eight worksheets, is part of GST Network's approach to make tax compliance easy and convenient for taxpayers and also reduce the time of compliance. This Excel template can be downloaded from the GST common portal (www.gst.gov.in) and can be used by taxpayers to collate all invoice related data on a regular basis.