Goods & Services Tax (GST) in IndiaPRE & POST GST Prices Under Surveillance

PRE & POST GST Prices Under Surveillance

As per various reports , the prices are under close surveillance.Some companies have also got calls for pre and post GST pricing.

The most enquired segment is makers of consumer goods and handsets, as well as some restaurant chains, by local tax authorities seeking details of invoices before and after GST as part of the exercise. 

Anti Profiteering

The Government after incorporating anti profiteering provision under CGST Act/SGST ACT/UT-GST Act is equally keen that the benefit of the reduced price should be passed over to the end consumer.

Malaysia and Australia had put in place a mechanism to ensure prices didn’t shoot up after GST was implemented in those countries. Malaysia has benchmark price system whereby price index book is released on regular basis on the basis of hyper and supermarket prices.

The reason of such inquiry at this nascent stage is also due to economical and political reasons. Everywhere GST was introduced it resulted an increase in inflation.The Government has already faced all round criticism for so called hasty implementation of GST. Further, elections in some States are already on agenda.

MRP Declaration

The exercise on anti profiteering may bring some control measure especially after guidelines were issued for declaring MRP if old packing materials are used. Further, every person increasing prices have already been instructed to declare it in atleast two newspaper.

Hence, the onus has been casted upon the business houses to have self assessment and if they fail to declare in newspaper it will be presumed that no price has increased. In such a case, the but natural conclusion would be either the prices have gone down or remained as such. In both the situation, the business houses will have to sustain their pricing

Price Intelligence

The government has so far maintained that the anti-profiteering provision is a deterrent and expects industry to pass on any cost reductions due to GST to consumers and not raise prices. Implicit in this was the assurance that investigations would be triggered by consumer complaints. 

The government is also monitoring prices and the supply situation in various commodities. It must be noted that as a case study almost 200 Joint secretary and additional secretary have been assigned with 4-5 districts each to closely watch implementation. 

The government was also alarmed by various reported modus operandi which people deployed either due to non understanding of GST or to take undue advantage of GST whereby they landed into selling one pair of shoes as two separate pieces or salwar kurta separately to keep themselves in the lowest range of GST rate slab.

It must be noted that price intelligence exercise with respect to price reduction in various commodities have already been done by government and it is still ongoing process for various other industry. Above all, every prudent person has realised the fact that all price reduction should be suitably passed over to the consumers.

Caution

It is also to note that competition is also on the card amongst businesses to tap and tackle these issues in healthy manner, but we must caution that non-ethical practices in this sensitive issue cannot be ruled out as well !