July 19, 2017
In order to prevent inflation as a result of the Goods and Services Tax (GST), tax departments around the country are keeping an eye on prices post GST implementation on 1 July, 2017. The Economic Times reports that several restaurants chains and consumer goods and handsets makers were contacted by local tax agencies to provide details of invoices pre- and post-GST implementation. This exercise is aimed at ensuring that prices do not shoot up due to GST rollout.
Several notices were sent to companies in Tamil Nadu, Puducherry, Maharashtra, Andhra Pradesh and other states by local tax authorities asking the companies to send information about selling prices of their top commodities. Some companies also received phone calls from tax authorities seeking price information.
The Goods and Services Tax (GST) is an indirect tax in India applicable across the country. GST subsumed most of the existing levies and taxes such as value added tax, excise duty, services tax etc. A similar goods and services tax exists in other countries such as Singapore, Australia, Canada and Malaysia. Some of these countries experienced retail inflation as an aftermath of GST implementation. Hence, the Indian Government has implemented several measures to ensure that such a situation does not arise in our country.
The Government has included an anti-profiteering provision in GST to acts as a deterrent against inflation. It also expects that this provision will motivate the companies to pass on the benefits of GST to the consumers. It is also monitoring the prices and supply situation and has tasked many high ranking bureaucrats to keep an eye on GST implementation in all parts of the country.