{"id":1781,"date":"2020-03-26T17:48:01","date_gmt":"2020-03-26T12:18:01","guid":{"rendered":"https:\/\/www.icajobguarantee.com\/?p=1781"},"modified":"2026-02-12T15:51:05","modified_gmt":"2026-02-12T10:21:05","slug":"gst-course-anti-profiteering-measures","status":"publish","type":"post","link":"https:\/\/www.icajobguarantee.com\/blog\/gst-course-anti-profiteering-measures","title":{"rendered":"GST Reforms: Anti-Profiteering Measures You Should Know"},"content":{"rendered":"
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Goods and Services Tax (GST) as the poster boy of Indirect Taxation in India has been persistently in the news since its implementation. The tax came into effect from 1 July 2017 through the implementation of the 101st Amendment of the Indian Constitution. A thorough understanding of GST is a must for successfully pursuing any GST course<\/a>.<\/span><\/p>\n

To recall, GST is an Indirect Tax (or Consumption Tax) used in India on the supply of goods and services. The GST replaced existing multiple taxes levied by the central and state governments except for a few state taxes. It is a comprehensive, multistage, destination-based tax.<\/span><\/p>\n

So what are the profiteering and anti-profiteering measures that come under the ambit of the GST regime? Read on.\u00a0<\/span><\/p>\n

Profiteering<\/b>\u00a0<\/span><\/span><\/p>\n

Well, to understand profiteering, it\u2019s imperative to understand profit margins. When a company sells products, it gathers a variety of expenses – like those incurred from taxes, building rent, raw material costs, and packaging costs.<\/span><\/p>\n

Understandably, the company needs to charge a higher price to make a profit. The difference between those expenses and the revenue got from selling the products is the profit margin. Profiteering happens when product prices are inflated unfairly to create a higher profit margin. Companies may do this when there\u2019s a high demand for their products, or when supplies are scarce.<\/span><\/p>\n

As things stood right after the introduction of the GST regime, opportunities were readily created for profiteering, thus it called for strict measures right away.<\/span><\/p>\n

Anti-Profiteering Measures under INDIAN GOODS AND SERVICES TAX ACT, 2017<\/b><\/span><\/p>\n

Understanding profiteering measures is important to excel in any GST course.<\/span><\/p>\n

The anti-profiteering rules are rather straightforward. If a company falls under a lower tax rate than in the pre-GST era, or if it gets a tax reduction due to the input tax credit, it must pass on those tax benefits to its customers now that GST is here.<\/span><\/p>\n

The rules say that the firm should come up with a \u201ccommensurate reduction in prices\u201d in order to achieve this. It is supposed to do the same if a particular product\/ service from the entire product\/ service range of the company is moved into a lower GST rate slab.<\/span><\/p>\n

The government rules do not specify how a Company can pass on these benefits \u2014 instead, it gives the anti-profiteering Standing Committee the power to judge each company on an individual basis.<\/span><\/p>\n

Official GoI measures listed in the GST Act, 2017 are as under :<\/span><\/p>\n