Nirmala Sitharaman, the Finance Minister, chaired the 35th GST Council Meet under the Modi 2.0 government for the first time after taking charge of the Finance Ministry.
The National Anti-Profiteering Authority (NAA) was constituted to make sure that the reduced rate of tax or input tax credit (ITC) benefit is passed on to a recipient via the commensurate reduction in prices.
The term of NAA was scheduled to end by 30 November 2019. The GST Council has extended this tenure by two years, i.e. 30 November 2021.
With this extension, NAA will not only be able to take up all the pending cases but also will be able to take up new cases which might come up in the future due to issues related to GST rate cuts.
Also Read: Agenda for 35th GST Council meet
However, a few of the financial experts believe that an NAA tenure extension alone may not be enough considering the number of times NAA was caught in litigations.
In addition to tenure extension, reports are specifying that the GST Council has also sanctioned a new mechanism to check on profiteering. Tax officers have been authorised to perform anti-profiteering checks in their respective jurisdictions.
The GST Council has also announced that companies which are involved in profiteering will face more stringent penalties. Currently, a company has to deposit Rs 25,000 as a penalty apart from depositing the profiteered amount.
Going forward, the GST Council has announced up to 10% of the profiteered amount as the additional penalty for companies which do not surrender the profiteered amount within 30 days.
The GST Council aims to implement an electronic invoicing system with respect to B2B transactions in phases. E-invoicing will assist taxpayers in backward integration, will help in automating tax-related processes, and will help the tax authorities to curb tax evasion.
Phase 1 is anticipated to be voluntary and should be functional, starting from January 2020.
The government will need to address the anti-profiteering related concerns on a priority so that the primary purpose of the recipient getting benefitted from the implementation of GST is served.
Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.