Anti-profiteering rules, penalties worry MSMEs in Telangana

So far, 85 per cent of traders across the state have registered themselves under the GST regime.

Published: 22nd June 2017 08:05 AM  |   Last Updated: 22nd June 2017 08:05 AM   |  A+A-

Express News Service

HYDERABAD: With less than 10 days left for the Goods and Service (GST) regime to come into effect, apprehensions about anti-profiteering and penalties have been worrying Micro, Small and Medium Enterprises (MSMEs) in the state.

So far, 85 per cent of traders across the state have registered themselves under the GST regime. Hyderabad has seen 100 per cent enrolment by manufactures, though some firms in the service sector are yet to sign up. The registration process will begin again on June 25.  

However, people in the MSME sector say that the two month relaxation period given by the Centre is not enough to get everybody acquainted with the system. Concerns also exist about the Anti-Profiteering rules under GST that could end firms being de-registered if they fail to pass on the benefits of low prices of certain commodities to the consumer.  “Whatever the benefits of GST, it will be passed on to the consumer but the Anti profiteering rules can be draconian. It’s very difficult for small traders if such a rule is introduced at this stage.” said Ravindra Modi, Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry (FTAPCCI).

“In a free market, like India it’s the consumer who decides the prices, it’s not the company nor the government who decides. This rule could be used as a harassment tool against traders. The intention maybe good at heart at the highest level but on ground reality it will be very difficult, he added.

Punishing tax evasion

Under the GST regime, failure on part of the trader to file taxes on time would attract a penalty. The centre has given two months leniency period for the trader to adapt to the new tax regime. “Connectivity is the real problem in rural India, though Telangana fares better in terms of connectivity, it still has a long way to go. The penalty for failure to file is heavy and so the two months is not enough for the traders in the country to adapt to the system, it should be two years,” Modi said.

Authorities not worried

“We want to handhold the traders and guide them initially. There will be mistakes initially and it will be dealt with accordingly, whenever genuine mistakes are there we will deal with it,” said ARS Kumar Commissioner of Customs and Central Excise, Hyd.  Particulars on how the anti profiteering authority would distinguish between small and big traders is being worked out, he added, speaking at the sidelines of a seminar on GST on Wednesday.


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