States Demand Safeguards to Ensure GST Cuts Benefit Consumers
The GST Council is set to meet on September 3-4 to review GST 2.0 reforms. States want strict rules to prevent profiteering so that GST rate cuts actually benefit consumers. Key proposals include a temporary anti-profiteering law, consumer complaint platforms, and tighter monitoring of sensitive sectors. Businesses, however, warn about compliance costs and pricing disruptions.
The GST Council is meeting on September 3-4 to discuss the new GST 2.0 reforms. Many states want strong rules to ensure that when GST rates are cut, consumers actually receive the benefits instead of businesses keeping them.
Why This Matters
The main concern is profiteering. This happens when companies do not lower their prices after GST cuts and pocket the extra margin. If this occurs, consumers will not see the benefits, and the reforms may lose credibility.
Suggested Measures on the Table
- The Consumer Affairs Ministry may be asked to take action against profiteering.
- A consumer complaint platform could be created.
- A temporary anti-profiteering law lasting 4 to 6 months, with strict penalties, may be reinstated.
- Close monitoring of sectors like insurance, consumer goods, two-wheelers, and small cars, where rate cuts might not benefit buyers.
Concerns Raised
- No pass-through of benefits: Prices may not decrease, defeating the purpose of reforms.
- Pushback from businesses: Companies argue that changing price tags, adjusting old stock, and updating systems require time and money.
- Duty inversion risk: Some states worry that rate cuts could create tax inversion, potentially raising prices instead of lowering them.
Legal and Enforcement Angle
Previously, there was a strict anti-profiteering framework, but it was dismantled. Some states now want it reinstated, at least for a short time.
Officials state that existing laws already include provisions like Section 74, which addresses willful tax evasion. This can be used against profiteering without needing a new law. However, the final decision lies with the GST Council.
Industry’s View
Industry groups caution that sudden changes in GST rates can:
- Disrupt existing contracts and service agreements.
- Create challenges with inventory and pricing.
- Increase the compliance burden for businesses.
What to Expect
The upcoming GST Council meeting will aim to balance consumer interests with business realities. A key question is whether a temporary anti-profiteering authority will be reinstated.
The outcome will determine if GST 2.0 reforms truly benefit consumers or become bogged down in compliance issues.
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Krishna Gopal Varshney
An editor at apnokacaKrishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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Krishna Gopal Varshney
An editor at Myitronline
Krishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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