Anti-profiteering provisions, e-way bill on GST council table

The GST Council, chaired by finance minister Arun Jaitley, may also consider review of certain items, a finance ministry statement said.

By: ENS Economic Bureau | New Delhi | Updated: June 16, 2017 3:33:03 am

Tax rate on lottery along with draft rules relating to e-way bill and anti-profiteering provisions will be discussed by the Goods and Services Tax (GST) Council in its 17th meeting on Sunday. The GST Council, chaired by finance minister Arun Jaitley, may also consider review of certain items, a finance ministry statement said. The Council will also discuss draft GST rules and related forms for advance ruling, appeals and revision, and assessment and audit.

In the last meeting of the Council on June 11, tax rates for 66 items, including agarbatti, packaged food and insulin, were lowered, out of 133 items considered for review. With regard to hybrid cars on which industry has been seeking a reduction, Jaitley had hinted that it will not be reviewed, saying the industry demands were not in sync with a study conducted by tax officers.

The Council had last month fixed 43 per cent tax (28 per cent GST plus 15 per cent cess) on hybrid cars, a rate that industry felt was too high for the fuel efficient vehicles.

Once the rules on ‘e-way bill’ are finalised, the GST Network is expected to float a Request for Proposal for roping in an IT partner. A draft version of the RFP was put in public domain for feedback till June 7.

The GST Council had in April come out with the draft e-way bill rules that made it necessary for any movement of goods, within or outside the state, having value of more than Rs 50,000 to be registered with the GST-Network (GSTN).

As per the draft, GSTN would generate e-way bills that will be valid for 1-15 days, depending on distance to be travelled — one day for 100 km and 15 days for more than 1,000 km transit. The tax officials can inspect the ‘e-way bill’ anytime during the transit to check tax evasion.

Industry, however, has expressed concerns over this saying that the Rs 50,000 limit was too low and that the timeline for completion of transport operation was “impractical and removed from reality”. They also felt that the e-way bill would be applicable to movement of all kinds of goods without making any distinction between goods that were evasion prone or not.

With regard to anti-profiteering rules, the final structure of the authority as also who will have the power to levy penalty would become clear. According to the draft rules agreed upon, when a complaint is received about any company or a trader making undue profit by not passing on the benefit of lower tax incidence because of GST, it would be referred to a standing committee appointed by the Council.

The committee would decide whether an inquiry should be initiated on a complaint. The new anti-profiteering authority will carry out an investigation only when the committee recommends so.

With industry flagging concerns regarding the anti-profiteering provision, Chief Economic Adviser Arvind Subramanian had moved a suggestion seeking the insertion of a sunset clause of nine months or a year. As per the draft rules, in cases where profiteering will be established, the taxpayer would be directed to reduce price; return the amount equivalent to the amount not passed to the recipient by way of commensurate reduction in prices along with 18 per cent interest; or recover the amount not returned within 30 days that shall be deposited in the Consumer Welfare Fund.

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