New Delhi - The GST Council on August 5 appealed to the Indian industry to pass on to customers the benefit of the novel input credit system introduced in the new pan-India indirect tax regime that is available to suppliers of goods and services in the country.
"Many industries are not giving the benefit of input credit to customers, and we are hoping the market mechanism compels industry to pass on this benefit," Finance Minister Arun Jaitley said following the twentieth meeting of the GST Council, which was also the first since the Goods and Services Tax was rolled out on July 1.
"I make an appeal to industry, through the media here, to pass on the benefit of input credit to consumers," he said.
Under GST, goods and services providers will get the benefit of input tax credit for the goods used, effectively making the real incidence of taxation lower than the headline taxation rate.
The GST law also has an anti-profiteering provision meant to ensure that businesses pass on the benefit of lower tax incidence and availability of input tax credit to the consumers. It provides for screening committees at both central and state levels under the aegis of the Council, which will investigate any complaint regarding profiteering and fine businesses found violating the provisions.
"The screening committees at both central and state levels should act as deterrents to profiteering and my hope is that they are used as less as possible," Jaitley said.
The National Anti-profiteering Authority has been proposed a three-tier structure including a committee at the state level to deal with local complaints.
While Revenue Secretary Hasmukh Adhia said at the briefing that the anti-profiteering screening committees would be set up in 15 days, the Finance Minister expressed the hope that the committees would not be required to go into action too soon.
Jaitley said that the Council also decided to implement the GST provision on e-way bills requiring goods more than Rs 50,000 in value to be pre-registered online before they can be moved.
"The GST Council decided to implement the e-way bill law. There will be no check posts and the whole process will preferably be technology-driven with human intervention being kept to the minimum," he said.
"e-way bill will not apply to exempted goods, as well as on transport of goods in a 10-km limit in a city," Jaitley added on the exemptions to the e-way bill provisions.
Adhia said that it had been decided to implement e-way bills from October, thus allowing time to the states to put in place the required technologies.
Jaitley also told reporters that the fitment committee of the Council decided on the revisions to the rate structure made earlier to certain items.
"The job work rate for all kinds of work in the textile chain, such as apparels, shawls, carpets, has been uniformly kept at 5 per cent," he said.
He also said that the GST on central and state government works contracts, which was earlier at 18%, had now been revised downwards by the Council to 12% along with the benefit of input tax credit.
The next meeting of the GST Council has been fixed for September 9, to be held at Hyderabad, Jaitley added.