Businesses have so far returned ₹510 crore they have allegedly profiteered from consumers, and they face the prospect of returning a larger amount to consumers, according to official estimates on the regulatory action on goods and services tax (GST) related profiteering by the industry.

Companies have either returned to individual consumers or have deposited in designated consumer welfare funds ₹510 crore, out of a total allegedly profiteered amount of ₹1,500 crore, said a person privy to the regulatory action.

This is the magnitude of the tax benefits companies have so far allegedly not passed on to the consumer in the GST regime by not lowering the price of goods and services after the government reduced tax rates and made more tax credits available to businesses. This estimate is based on the cases on which adjudication orders have so far been issued by the National Anti-profiteering Authority (NAA) looking into the investigation reports of the Directorate General of Anti-Profiteering (DGAP), the person cited above said. The amount will be higher if adjudication matters pending before NAA are considered.

Consumers like home buyers, who could be identified, were returned the allegedly profiteered amounts, while in the case of lower priced items, where the consumers could not be identified, the amounts were deposited in the designated consumer welfare funds.

Although the regime is known as ‘anti-profiteering,’ its purpose is not to come in the way of profit-making by firms. “The anti-profiteering regime is not here to prevent anyone from making profits. But when the government in public interest lowers tax rate or raises input tax credit available to the industry, that relief should be passed on to consumers,” said the person.

The anti-profiteering regime is set to face a shift soon, with the Centre set to notify subsuming its regulatory architecture within the Competition Commission of India (CCI). The idea is to subsume DGAP, which investigates complaints of GST-related profiteering, into the office of the director general of investigation attached to CCI.

Several petitions challenging the constitutional validity of the anti-profiteering provision in GST law are now pending before the Delhi high court.

An email sent to the finance ministry spokesperson on Friday seeking comments remained unanswered till the time of going to press.

Source: Live Mint
https://www.livemint.com/politics/news/over500-cr-in-gst-linked-excess-profits-recovered-11665337086707.html