NEW DELHI: Days after the National Anti-Profiteering Authority (NAA) slapped notices to many businesses for not passing on the benefits of reduced taxes and input tax credit under the goods and services tax (GST), the government has asked the agency to go easy on businesses.
“The purpose of the agency is to catch wilful defaulters and not scare businesses. When such news comes out, it damages the brand reputation of the company. The purpose is to safeguard consumers’ interest and not to harass businesses. So, there is no need to take a very aggressive stand,” said an official from the Department of Revenue under the finance ministry.
NAA was formed to safeguard consumers against misuses of GST. NAA is the top decision-making body under GST’s anti-profiteering mechanism, headed by a chairperson B N Sharma and four technical members.
The framework of the body comprises a standing committee, screening committees in every state as well as the Directorate General of Safeguards. If consumers feel that the benefit of a rate cut is not being passed on to them, they can approach the state’s screening committee for relief.
“Generally, notices are based on complaints by the public or individuals. After that, DG Safeguards will investigate all these cases. Only if they find that the defaulters have willfully violated the law will they initiate action,” the official added. Directorate General Safeguards is the investigative arm of the revenue department under the finance ministry.
Last week, NAA had slapped notices to three companies Jaipur-based departmental store selling FMCG major Hindustan Unilever products, shopping outlet Lifestyle International and master franchisee of Mc Donald’s, Hardcastle Restaurants for violation under GST law.
The action was initiated against these companies after the agency received complaints that these firms were not passing on the benefit of GST given by the government to the final consumer.DG Safeguards has asked these firms to provide their balance sheet, trial balance and profit and loss account for the past one year and will complete their investigation within three months.
“Till Dedcember 26, 169 complaints have been received alleging suppliers of Goods/Services have not passed on the benefits to customers. The provisions contained in Rule 122 to 137 have been provided in CGST Rules, 2017, to deal with such complaints,” minister of state for finance, Shiv Pratap Shukla told Parliament on Friday.
“Legal Metrology department is also separately dealing with violations of the department’s Circular related to revision of MRP provisions in light of the implementation of GST,” he added.