Economy

Companies may pay higher penalties for failing to pass GST rate cut benefits, says report

Updated : August 31, 2018 10:30 AM IST

Officials from various ministries including finance and law held a meeting earlier this week to discuss the proposal.

At present, the penalty for such an act is Rs 10,000 or the amount of tax evaded, whichever is higher.

Companies that fail to pass on the GST rate cuts to the consumers may have to pay higher penalties as the finance ministry is considering to bring an amendment in the law, Business Line reported.

Officials from various ministries including finance and law held a meeting earlier this week to discuss the proposal, the report said. At present, the penalty for such an act is Rs 10,000 or the amount of tax evaded, whichever is higher.

There have been allegations that companies do not pass on the entire benefit of the tax cut to the customer citing hjgher manufacturing costs, a senior ministry official was quoted saying as.

He added that post rate reduction, companies sometimes lower prices selectively. For instance, they may cut the price of larger packs but not smaller ones, or cut the price of one brand but not the other.

Since the introduction of the Goods and Services Tax in July 2017, the GST council has lowered the duties on 384 goods and 68 services, including the latest round of rate reduction on nearly 100 products and services last month, the report said.

Have you signed up for Primo, our daily newsletter?

It has all the stories and data on the market, business, economy and tech that you need to know.

To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more

Companies may pay higher penalties for failing to pass GST rate cut benefits, says report

You May Also Like

TVS Motor unveils its first electric two-wheeler with 75 km range; price starts at Rs 1.15 lakh

Bank of Baroda reports net loss of Rs 1,406.9 crore in Q3, misses estimates

Deadly Coronavirus wreak havoc in China, claims 41 lives, nearly 1,300 confirmed cases, 237 critical

Trending on CNBC-TV18

recommended for you