NEW DELHI: The govt expects businesses to pass on the benefit of lower goods and services tax (GST) to consumers and the states and the Central Board of Indirect Taxes (CBIC) and Customs will engage with industry on the issue.
"...last time, industry had passed on the benefits of rate cuts and you would have seen that a lot of industry have come out and committed to transmitting this benefit... we will engage with industry and ensure that benefits are given to the consumers," revenue secretary Arvind Shrivastava said at a press conference.
Also read: From paneer to paratha, Centre explains tweaks in GST ratesThere are indications that industry will respond positively. "CII strongly holds the view that industry would swiftly pass the benefits to the consumers and partner with govt to ensure a smooth, timely rollout that lifts demand and supports jobs," industry body CII said in a statement within minutes of the announcement. When GST was introduced in 2017, the govt had put in place an anti-profiteering provision, which pushed industry to pass on the benefits. While the anti-profiteering agency has been disbanded, the provision still sits in the statutes.
Also read: GST rate cuts bonanza! What is cheaper and dearer? Check full listShrivastava, however, suggested that industry was largely compliant, pointing out that 704 cases (60%) were registered in the initial years of GST, with alleged profiteering of Rs 4,362 crore.
Shrivastava also said that CBIC will issue guidance on transition for goods that have already been sourced and are lying with dealers and distributors. A govt official said that goods that are in stock and will see reduction in GST will have to be sold at the new tax rate after Sept 22, but businesses will be able to get credit for it.