Hope anti-profiteering law won’t have to be used: FM Arun Jaitley

Finance minister Arun Jaitley has expressed the hope that the government
will not have to use the anti-profiteering provision of the goods and services tax (GST) and said prices should drop overall under the new regime to be put in place on July 1.
Jaitley said in an interview that there may be some challenges initially, but expects
companies to get accustomed to GST quickly, calling for patience as the reform is rolled
out.
“On an overall basis, the net weighted average of the whole consumption basket is less
than what it was,” he said. “So, in terms of weighted average it should come down.”
India is one of the few countries that has shown it has the ability to carry out structural
reforms, Jaitley said, citing insolvency laws, overseas investment reforms and the Air India disinvestment plan.
On some sections of industry seeking a GST deferral, the minister said the government
has been atypically ahead on this count.
“Normally, in a reform process, the private sector is ahead of the government,” he said.
“This time government seems way ahead of private sector. For an industry association to
say postpone it in face of a constitutional amendment was highly regrettable.”
The minister expects companies to pass on the benefits of GST. “There is already an inbuilt mechanism of anti-profiteering clause,” he said. “I hope we do not have to use it. It should act as a deterrent.” GST is expected to reduce incidence of taxation on goods by
providing full credit for taxes paid on inputs.
The anti-profiteering clause has harsh provisions including cancellation of GST registration of those not sharing gains.
He said GST — which replaces 17 taxes such as central excise duty, service tax, value-added tax, and 23 cesses —was an efficient and simple tax.
“There will be challenges initially,” he said. “There can be hiccups even in the most perfect technology but the beauty of a perfect technology is that it removes those hiccups as soon as possible. This is a reform that is in the interest of the common man, traders,
businesses, industry and the whole country. You need to be patient.”
In response to a question on the possible boycott of the proposed midnight launch ceremony by some political parties, Jaitley said GST is a ‘saanjhi vyavastha’ (joint mechanism) for the whole country that was finalised with the contribution and support of all parties.
“We have had consultation at every stage of the formulation of the new tax. At the time of the constitutional amendment, we incorporated suggestions made by Congress,” he said. “All bills have been approved by them. Their state governments have passed
GST legislations. Finance ministers of the states where their party is in power have participated in the council and agreed to the GST framework.”

He said India had created a federal institution in the GST Council and hoped that the tradition of decision-making by consensus will be followed in future as well.
KEY POLICY CHANGES 
India is one of the only countries making such key policy changes, he said.
“The whole world accepts that if anyone has shown the potential to carry out structural reforms (in the current global situation), it is India only. We carried out FDI reforms, we got largest FDI in the world… The government and prime minister have shown that political-level corruption can be ended,” he said.
Source : Economic Times
VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.
Advise for contacting VidyaSunil & Associates;
E Mail ID : vidyasunilassociates@gmail.com
Cell No. : +91 9739834819
Advertisements