Government today warned the retailors and manufactures against any profiteering during the GST transition phase. Companies should reduce the price for goods where the GST rates have come down. Only goods that ware manufactured before July 1 can be sold at the GST impacted higher price according to the Revenue Secretary Hasmukh Adhia.
Profiteering means retailors are not transferrin the reduced tax in the form of a reduced price to the consumers. Manipulation of prices on stocks is the route for profiteering. Government has decided to create an anti-profiteering authority during the transitional period. A five-member National Anti-Profiteering Authority, headed by a secretary-level officer, was proposed under the anti-profiteering rules issued by the Central Board of Excise and Customs.
Though the FMCG companies have quickly migrated to the new GST regime, most of the suppliers to them who provide components and raw materials are small or medium scale enterprises. These firms are slow on adopting the GST norms. According to the established entities, it will take time for the original value adders like component suppliers to adopt the GST norms while fixing the new tax adjusted price.
Government has given three-month time for retailors to sell unsold stock or inventories. Retailers are allowed to sell the inventories on pre-GST impact price till September 1. At the same time, they have to affix the stickers regarding the price change separately.
