With the passing the benefits of tax rate reduction or input tax credit to consumers in the GST regime, consumers may get volume benefit in lieu of only price reduction as the National Anti-Profiteering Authority (NAA) is allowing ‘grammage increase’, an official said here on Friday.
If a supplier of goods increases the grammage or volume to pass on the benefit of tax reduction or input tax credit to consumers, instead of lowering prices, the question arises, and then what would happen?, NAA Chairman B.N Sharma.
“The law says (that) reduction in rate of tax or the benefit of input tax credit is passed on to the recipient by way of equal reduction in prices.
“As trade facilitator, the authority would see the intention of the supplier. We have to see this in a large context. In that case, we took the risk and allowed it,” he said in an interactive session at Merchants’ Chamber of Commerce and Industry, as per the local reports.
Sharma however, mentioned the grammage increase has to be “proportionate” to the tax reduction.
He also said the authority would examine the timing of passing such benefits and volume benefits should not be part of ongoing business promotion.
Clarifying the authority’s role, Sharma said it is not a “price regulator” and is “not mandated even to issue sectoral guidelines.
He added that the MRP is inclusive of cost, margin, tax and anti-profiteering deal with the tax component in it.
According to him, anti-profiteering activities must be seen from the lens of the consumers.