Can anti profiteering in GST give benefit to end customers?
The government must clearly state the rules and methodology before justifying its anti profiteering in GST which are solely based on socialist principles.
The Goods and Service Tax was introduced in India so that it can eliminate the cascading effect of taxes, in simple language which means a tax on tax. The principle on which GST work, depends on the fact that tax on any input or input service utilized during the process of developing a product or a service would have to be offset against the subsequent output tax paid. To keep the consumer in mind and to eliminate the supply chain inefficiencies this credit system has been drawn.
But a serious question arises if any unit (for example, a wholesaler) in supply chain decided to take benefit of this situation of reduced tax rate created by GST and do not pass the benefit to the end consumer. Then what will happen?
The government has taken some important measures to cut this undue advantage by introducing Section 171 into the Central Goods and service (CGST). The importance of CGST is that the benefits availed through extra input tax credit (as against earlier) or a reduction in the rate of tax on any supply of goods or services has to be passed on to the consumer immediately.
One of the important objections raised against anti profiteering in GST is that it adds an additional burden i.e., it is not necessary that reduction in rates of taxes will result in the reduction in the final price of any product or service.