Tax cuts kick in; but what about price cuts? Govt to keep watch

All government departments are conscious of the need to ensure consumers benefit and will be watching prices, one of the two persons cited above said.

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The government’s engagement with the industry will be of “vigilance and gentle persuasion” rather than invoking any administrative powers, the person added.

“If profiteering conduct is seen, the government can bring in the Competition Commission of India (CCI) at any time to address that. However, at the moment, that is not contemplated, and the signals coming from the industry indicate price reductions to pass on the benefit of the GST rate cut to consumers,” the person said.

Queries emailed to the finance ministry on Friday remained unanswered.

In the early days of GST, there existed a formal mechanism to check companies pocketing the gains of tax cuts; however, that system ended in April this year. The principal bench of the GST Appellate Tribunal will continue to adjudicate on past cases, but no fresh complaints are being accepted by any authority.

Creating a short-term regulator to monitor profiteering is impractical because it would be difficult to wind it up later, the person cited above said.