GST reforms: How will the Centre ensure tax benefits are passed on to consumers

The central government will take steps to ensure that the benefits of the Goods and Services Tax (GST) are passed on to consumers. The Union Consumer Affairs Ministry will reportedly closely monitor social media complaints, representations made by consumer groups, and complaints received in the national consumer helpline (NCH) to check if companies have indeed transferredGST savings to customers.

The central government on Wednesday eliminated the 12 per cent and 28 per cent GST slabs, placing items in these categoriesin 5 per cent and 18 per cent slabs. The move will take effect from September 22.

GST reforms: What steps will the Centre likely take?

Sanjay Kumar Agarwal, chairman of the Central Board of Indirect Taxes and Customs (CBIC), told Mint that tax authorities will closely monitor the price behaviour of businesses after September 22.

An official told the newspaper that the government wants to ensure "affordability for consumers and prevent denial of rightful benefits".

Another person said that denying the benefits of GST cuts to consumers will be treated as an unfair trade practice. Notices will be issued, the person said, adding that penalties will be levied if the responses to these notices are found to be unjustified.

The ministry can take suo motu cognizance of the denial of the GST benefits to the customers.

The officer further said that not passing on the benefit of GST reduction to customers could be deemed an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.

The official said in such cases, consumer courts can impose penalties amounting to Rs 50 lakh.

However, the officials said that the ministry will limit its role to ensuring that consumers receive the benefits of the revised GST rates.

The Goods and Services Tax Appellate Tribunal (GSTAT) will be made operational for accepting appeals before the end of September, and is expected to begin hearings by December 2025, the paper reported.

Most of the items in the now-eliminated slabs, including FMCG products and passenger vehicles, will become cheaper from September 22.

The central government has rationalised the GST regime to ensure the masses have more disposable money for boosting domestic consumption.