Economy

Cabinet Approves Anti-Profiteering Authority; McDonald’s Clarification on Viral Bills

Cabinet Approves Anti-Profiteering Authority to Check Over Charging Businesses

The Cabinet has approved National Anti-Profiteering Authority to ensure that the advantage of sharp reduced GST rates reaches the people. Customers have complained that businesses have been cheating with people.

Why Require an Anti-Profiteering Authority (NAA)?

On November 10, 2017, the government reduced GST rates of many items including the rates on AC/Non-AC restaurants from 18% to 5%. The reduced prices were implemented from November 15 and people expected a sharp decline in prices. To their shock most of the items and services cost the same price despite the reduction in GST rates.

Many customers complained about the cheating that the businesses were doing with customers. One of the customer complained to McDonald’s after he found that the item that he purchased before Nov 15 at Rs 120 (Price before charging GST) now costs Rs 135 exclusive of GST. Later the company issued a clarification stating Input Tax Credit as the reason for the rise in rate and the company has just structured the changes to ensure the final price remains the same.

It is hard to believe that after adding ITC disadvantage, the price will be exactly same as the previous. In order to check the irregularities the government has cleared National Anti-Profiteering authority that will keep the businesses in check in case if they commit such irregularities.

Government Takes the Concern of Customers Aptly

The constituted body known as NAA will comprise of a secretary level officer and four technical members from state or center. The NAA will comprise of the standing committee, screening committee at state level and director general of safeguards in CBEC to safeguard the interest of customers.

If any customer feels that he has been cheated then he can complain to the screening committee and in some case to the standing committee at the center level. If the business is found guilty then he will have to pay penalty and even his registration can be cancelled under the provisions in GST.

A Cause of Worry for Restaurant owners due to ITC?

Businesses still live in the fear of Inspector Raj that was a terrible experience for traders and the NAA can instill fear in the mind of businesses and especially the restaurant owners who were in the complaint list of customers. Though the authority constituted is pro-consumer but it can be disastrous for the businesses.

What restaurant owners can do is to make fresh menu of the services they provide in order to rescue themselves from unwanted scrutiny. They can clearly mention the pre and post GST rates and ITC cost in order to explain to their customers. This move will be beneficial for both the consumer and the business as any controversy may definitely lead to a negative impact on the business.

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