Even before the GST came into effect on July 1, one of the stated objectives of the Central government was to eliminate multiple taxes and passes down the benefit to end consumers with a reduction in the prices of goods and services.
In an attempt to further reduce the burden of tax on end consumers, the government is continuing slashing GST rates. Within a year, this is the third time when the government announced the GST cut last week.
In November last year, the GST council slashed the tax on 210 products and made it effective from November 15. In January, it further slashes GST taxes on various products. Last week, it announced another tax cut on 50 more products.
It even introduced an anti-profiteering clause in the GST law to ensure that a commensurate cut in the prices on account of a reduced tax rate is passed on to the consumer.
Amidst this, tax authorities are planning to launch a tax audit on e-commerce platforms to ascertain whether tax benefits have reached to end consumers.
The National Anti-Profiteering Authority wants to know if e-commerce companies returned the excess tax to consumers and have directed the director general, audit, to conduct the examination.
Experts say that the objective is to check if the excess amount collected before rate reduction has indeed been refunded to buyers or not. It becomes critical for e platforms to examine this aspect and refund the amount as soon as possible.
Besides, tax authorities are also keeping a close on watch companies to ensure that rate cuts were being passed on to consumers.
Nestle, Hindustan Unilever, Jubilant FoodWorks (Domino’s Pizza), Hardcastle Restaurants (McDonald’s), retailer Lifestyle International and auto firm Honda Motor are some of the companies which have received notice from the government for allegedly not passing on GST rate cut benefit to consumers.
The development was first reported by ET.