Do the creation National anti-profiteering authority met its desired objectives under GST regime? Analyse (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· Government has considered extending the term of the DGAP, which is supposed to have a two-year sunset horizon.
· The government claims this is because the GST council continues to tweak tax rates and so anti-profiteering continues to be required. Meanwhile, the DGAP itself has also expanded the nature of its operation.
· The anti-profiteering authority wasn’t effectively implemented because the government did not lay out details on how it would determine that profiteering had occurred.
· In India, nothing is specified other than the process to be followed.
· Companies should be free to respond to tax changes, particularly complex ones such as the GST which have multiple conflicting effects on their costs, in a manner determined by competitive dynamics and commercial considerations.
· If competitive dynamics are weak and do not allow for proper transmission of tax cuts, that is the business of the Competition Commission.
· But all future tax changes cannot be judged on the same yardstick as the initial introduction of the GST. They might not all be meant to lower prices for consumers — other economic goals might be in play.
· Thus, the stated reason to extend the authority’s term makes little sense. It should be wound up by the scheduled date.
Ramakrishnan 6 years
Please assess this answer
IAS Parliament 5 years
Good answer. Keep Writing.
IAS Parliament 6 years
KEY POINTS
· Government has considered extending the term of the DGAP, which is supposed to have a two-year sunset horizon.
· The government claims this is because the GST council continues to tweak tax rates and so anti-profiteering continues to be required. Meanwhile, the DGAP itself has also expanded the nature of its operation.
· The anti-profiteering authority wasn’t effectively implemented because the government did not lay out details on how it would determine that profiteering had occurred.
· In India, nothing is specified other than the process to be followed.
· Companies should be free to respond to tax changes, particularly complex ones such as the GST which have multiple conflicting effects on their costs, in a manner determined by competitive dynamics and commercial considerations.
· If competitive dynamics are weak and do not allow for proper transmission of tax cuts, that is the business of the Competition Commission.
· But all future tax changes cannot be judged on the same yardstick as the initial introduction of the GST. They might not all be meant to lower prices for consumers — other economic goals might be in play.
· Thus, the stated reason to extend the authority’s term makes little sense. It should be wound up by the scheduled date.
