NEW DELHI: E-commerce firms are set to go through an audit by tax authorities after the National Anti-profiteering Authority (NAA) found on Wednesday that there was the possibility that GST rate cut benefits might not have been passed along to customers. The audit will be done by the Director General of Audit of the Central Board of Indirect Taxes and Customs (CBIC).
The NAA initiated the probe after it decided on a petition placed before it against Flipkart, with the petitioner stating that he had placed an order on the e-commerce website for which GST had been charged at 28 per cent. However, by the time of supply, the GST rate had been reduced to 18 per cent, but no refund of the excess tax charged had been made.
Delivering its verdict on Wednesday, the NAA had noted that it is “conscious of the fact that there may be several such cases in which the e-platforms had collected excess GST from the buyers and have not refunded the same after the tax was reduced on various products on November 15, 2017”.
To make sure such cases did not go undetected, the NAA “directed the Director General of Audit, CBIC, to audit the major e-platforms and submit findings to the authority”.
In this particular case, however, the NAA dismissed charges of profiteering by the e-commerce player since the excess tax had already been refunded to the petitioner. However, the petitioner’s case is not the only one where such tax changes had not been passed along to the consumer.
According to the NAA, Flipkart has disclosed that there are 7,254 orders where similar GST cuts had taken place between the order and the supply of the products. However, the NAA noted that the company has stated that they have already initiated the process of refunding the excess tax charged from consumers.
“Keeping in view the interest of the buyers, the respondent is directed to ensure than the refund of the excess tax is made without delay,” the order directed.
The anti-profiteering authority was set up last year to ensure that consumers get the benefit of tax rate reduction post the roll out of Goods and Services Tax (GST) from July 1, 2017.
Check online orders
With GST rates for another set of products reduced this week, tax officials say consumers who have placed orders online for items yet to be delivered should check if the rate cut benefits have been passed along by the vendors.