Anti-profiteering body gets two-year extension, penalties to hit harder

In a consumer-friendly move, the Goods and Services Tax Council headed by Finance Minister Nirmala Sitharaman has decided to extend the tenure of National Anti-profiteering Authority (NAA) by two years and introduce stricter penalties for defaulting companies.

The anti-profiteering watchdog can now impose a penalty up to 10% of the profiteered amount if the company fails to deposit the sum within 30 days of NAA's order.

The penalty is in addition to the requirement of returning the profiteered sum to the consumer and the government's Consumer Welfare Fund.

Currently, a penalty of up to Rs 25 lakh can be levied on firms for not passing on the benefits of GST rate cuts announced from time to time.

"The revised penal provisions on anti-profiteering are in line with government's intent to act strictly against GST defaulters and in view of the proposed rationalisation of GST rates," said Prashanth Agarwal of PwC.

But Agarwal added that there was no clarity on how long these provisions would continue.

The Council also provided relief to industry by extending the last date of filing GST annual return till August 31, revenue secretary Ajay Bhushan Pandey said after the GST Council meeting.

In another consumer friendly move which will also improve Centre's revenues, it has been made mandatory for multiplexes to issue e-tickets.

The Council has also approved the electronic invoicing system for business to business transactions.

The new system aimed at curbing tax evasion will be introduced in a phased manner. The first phase, to be rolled out from January 2020, will be voluntary for companies.

The focus of the GST Council meeting was simplification of compliance by companies as well as anti-tax evasion measures.

As part of simplification of GST returns filing framework, the government has decided to introduce a single-return form starting January 2020.

This would require taxpayers to file one return every month instead of two at present. It was also decided to allow the use of Aadhaar by companies to register with the GST network.

On the issue of taxation on lotteries and solar power projects, the Council also decided seek legal opinion of the Attorney General.

The decision on slashing GST rate on electric vehicles from 12% to 5% has, however, been sent to the fitment committee of the GST Council. Along with it, issues related to reduction in GST rate on electric chargers for the vehicles from 18% to 12% as well as on leasing of e-vehicles have also been referred to the committee. These would be tabled during the next Council meeting.