GST Update: There is news of relief for consumers. After the decision of Delhi High Court, in the coming days, more than 50 companies related to FMCG, consumer durables, manufacturing of electronics items and real estate will have to give the benefits of GST rate reduction and input tax credit to the consumers. Delhi High Court has upheld the legal provisions of anti-profiteering provisions under the framework of Goods and Services Tax.
After the implementation of GST across the country from July 1, 2017, tax rates on many things were reduced. In order for companies to pass on the benefit of reduction in GST rate on many products to customers, such legal provisions were made under the anti-profiteering provisions of GST so that consumers can get the benefit of reduction in tax rate. Then the government had also constituted the National Anti-Profiteering Authority to see whether the companies are passing on the benefits of tax rate reduction to the consumers or not. However, many companies were against the anti-profiteering provisions implemented under GST. Hindustan Unilever, Patanjali, Jubilant Foods, Nestle, Philips dragged CBIC to court over anti-profiteering provisions of GST. Questions were also raised on the formation and rights of the Anti Profiteering Authority.
But the Delhi High Court, while justifying the provision of anti-profiteering provisions in GST, said that it is a welfare step taken in the interests of the citizens and it does not violate the constitutional provisions in any way. The central government has the right to charge interest. The court said that Section 171 says that the tax which the government has decided not to collect should be given relief to the customers by reducing the price in the same proportion. The court said that this is in public interest and the step taken is a welfare step for consumers.
Delhi High Court said that the provision of Section 171 (1) against profiteering is in the interests of the citizens. The court said that the government has the right to make laws and anti-profiteering provisions are not a mechanism to fix prices. After the implementation of the GST law, anti-profiteering provisions were made so that companies cannot indulge in profiteering and consumers can benefit from the reduction in GST rates. Companies can pass on the benefits of reduction in GST rate and input tax credit claims to consumers.
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