Plugging tax evasion and consumer welfare took center stage in the first meeting of the Goods and Services Tax (GST) Council under the chairmanship of Finance Minister Nirmala Sitharaman on Friday.
The Council, during the half-day meeting, imposed stiff penalties on companies not passing on rate cut benefits to consumers, besides giving a two-year extension to the National Anti-Profiteering Authority (NAA), whose term would have expired in November.
However, experts said the council should come up with a methodology of calculating the profiteered amount. Without this, there is arbitrariness.
To plug tax evasion, measures like using Aadhaar for registration, voluntary electronic invoicing and mandatory electronic ticketing for movie theatres were approved.
“The decision to use Aadhaar for registration is a significant step and could lead to similar linkages with income tax,” said Pratik Jain, partner, PwC India.
As for the reduction in rates on electric vehicles from 12 percent to 5 percent and for chargers from 18 percent to 12 percent, the matter was referred to the fitment committee. “The view was that protocol was not followed as the matter was not discussed by the fitment committee,” said a government official.
The contentious issue of a uniform GST rate on lotteries has been referred to the attorney general (AG) of India.