The Goods and Services Tax (GST) is coming into existence w.e.f. 1st of July 2017.
On some items, there is a reduction in the rate of tax. This reduction in GST rate from the earlier rate reduces the price of the goods or services. The benefit of this reduction in rate and the consequent reduction in price should be passed on to by the seller of the goods or services to the buyer of the goods or services.
In the GST there is a provision for the benefit of the Input Tax Credit. This benefit of Input Tax Credit (ITC) must also be passed on by the seller of the goods or services to the buyer of the goods or services by a commensurate reduction in the prices of the goods or services.
In order to pass on this benefit, the GST law provides for an Anti-profiteering clause (Section 171 of GST) as a deterrence measure.
In view of the above, it is in the interest of the seller to pass on this benefit to the buyer, and it is also in the interest of the buyer to ask this benefit rightfully from the seller.
The Finance Minister, Mr. Arun Jaitley, has expressed the hope that the government will not have to use the anti-profiteering provision of the Goods and Services Tax (GST), the same shall act as a deterrence, and the prices should drop overall under the new regime, which is to come into existence w.e.f. 1st July 2017.
What is the effect of Anti-profiteering Measure in GST? #GST— Avadhoot Dandekar (@Webtwits) June 30, 2017
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