PSUs want vendors to meet anti-profiteering guidelines

NEW DELHI: Public sector enterprises have begun asking their vendors to furnish an undertaking that they meet anti-profiteering norms and have passed on the benefits of lower tax and higher input tax credit under the goods and services tax (GST) regime.
A number of state-run companies cutting across sectors and including the toptier ones like BHEL, Indraprastha Gas Ltd and SAIL have introduced such a clause for their vendors.
“This is to ensure that the company is ring-fenced against any eventuality if there is any challenge on anti-profiteering,” an executive of a state-run company said on condition of anonymity.
The GST regime provides full credit for taxes paid on all inputs used and has thereby lowered the overall tax incidence on both goods and services. The government has since the rollout of the new tax regime on July 1 repeatedly asked the industry to pass on the benefit of reduction in tax rate as also overall reduction in tax incidence due to availability of the input tax credit.
The GST Council has incorporated an anti-profiteering framework, on the lines of that in Malaysia and Australia, under the GST regime to ensure benefits of the regime are shared with consumers. On Tuesday, the government had announced a five-member board for the anti-profiteering authority.