Govt Trains GST Lens On 'New' Variants With Pricier Tags

(MENAFN- Live Mint)

New Delhi: The Centre is going all out to stop companies from sidestepping the cuts in goods and services tax rates. Going a step beyond its vigil on maximum retail prices, the consumer affairs ministry is set to monitor complaints of price manipulation, especially tactics such as retiring old models, adding minor or cosmetic features and passing them off as new, upgraded variants with a higher price tag, according to two officials in the know.

Consumer complaints in such cases will be linked with revenue enforcement to prevent unfair pricing practices and tighten oversight on profiteering.

With no anti-profiteering body in place, the consumer affairs ministry will especially focus on complaints related to price manipulation by businesses in the guise of changing features of consumer durable products, the officials said.

The products under scrutiny include all categories of vehicles, toys, fast-moving consumer goods, among other goods that have seen price changes following the GST revisions this week .

To help consumers, the ministry has created a dedicated GST category on its Integrated Grievance Redressal Mechanism (INGRAM) portal, where complaints can be registered following the new GST rates, charges, and exemptions that came into effect on 22 September.

The consumer affairs ministry has asked the National Consumer Helpline, the government's central grievance redressal system, to track such complaints.

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“We have set up a dedicated team to monitor all such complaints in direct consultation with the department of revenue and the Central Board of Indirect Taxes and Customs (CBIC). Under the mandate given to the consumer affairs ministry in the Consumer Protection Act, 2019, these complaints will be sent to the revenue department for further action," said the first of the two officials cited above.

As per practice, the revenue department will forward the complaints to the concerned enforcement agencies to act against businesses found involved in such practices.

“Companies are duty-bound to pass on the benefits of GST rate cuts to consumers, and any attempt to manipulate prices in the name of adding new features will be investigated by the concerned technical bodies of the department to verify their claims," said the second official.

According to a finance ministry notification, the Goods and Services Tax Appellate Tribunal will be made operational for accepting appeals in such cases before the end of September, and it is expected to begin hearings by December.

Queries related to the development sent to the ministries of consumer affairs and finance remained unanswered till press time.

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Experts say monitoring value-addition and ensuring transparent pricing will be key to safeguarding consumer interests under the new GST framework.“Consumers must not bear the burden when companies manipulate product features or retire older models to sidestep GST rate cuts. It is encouraging that the consumer affairs ministry is actively monitoring industry practices to ensure transparency and fair pricing," said Ashim Sanyal, chief executive officer and secretary of Consumer VOICE, an advocacy organization.

Mint had reported on 6 September that the ministry will scan complaints on social media, review representations made by consumer groups, and closely monitor complaints received on the National Consumer Helpline.

Under the rationalized GST structure, tax rates have brought under primarily two slabs-5% and 18%-from four earlier. There is also a new 40% tax on 'demerit' and luxury goods such as tobacco, sweet aerated beverages and top-end cars. Most daily use goods have been moved from the earlier 12% and 28% slabs to lower brackets, some slashed outright from 18% to 5%, and a host of essential items exempted from the consumption tax altogether.

There are precedents of the consumer affairs ministry escalating matters that are beyond its direct mandate. One such case was of Lotus365, an illegal online betting platform linked to money laundering. The ministry's Central Consumer Protection Authority (CCPA) did the groundwork and passed it on to the relevant agencies. In March, the Enforcement Directorate carried out raids at places related to the platform, which allegedly generated illicit funds through sports and casino-style betting. The case has since expanded into a multi-agency probe, with the directorate among those leading the investigation.

Also Read | How are consumer companies preparing for the GST rate cut rollout

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