Sec 171 – Anti-profiteering measure

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Sec 171 – Anti-profiteering measure 2017-04-14T02:23:31+00:00

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  • Miloni ShahMiloni Shah
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    #1051 |

    (1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
    (2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
    (3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

    Priya MadrechaPriya Madrecha
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    171.1    Introduction
    The objective of this section is to ensure that with the introduction of GST, taxable persons are not getting excessive profits, but shall pass on the reduction in price to the consumers.
    The Central Government may by law constitute an Authority or entrust an existing authority for this purpose.
    171.2    Analysis
    The registered person is expected to reduce the price on account of availment of input tax credit or reduction in tax rates. An authority would be notified for this purpose, who would exercise powers and discharge functions in a prescribed manner.  171.3 Comparative Review
    There is no such provision in the existing tax laws. Similar provisions are there in other countries.
    171.4 FAQs
    Q1. Who will constitute the authority for anti profiteering measure?
    Ans. The Central Govt. would notify.
    Q2. What is the responsibility of the authority?
    Ans. To examine whether a. Input tax credit availed by a taxable person have actually resulted in commensurate reduction in price of goods/services;
    The reduction in price on account of reduction in tax rate has actually resulted in a commensurate reduction in price of goods/services.

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