Ensuring compliance with GST Anti-Profiteering Law
I and a lawyer friend of mine here in Chennai brainstormed anti-profiteering in regards to latest gst changes yesterday.
Any business/brand has finished goods inventory at their factory/warehouse, in transit to distributors/C&F agents, at retailers or online sellers (eCommerce).
Say you are a TV manufacturer in Greater Noida and a particular TV had MRP of 50,000 rupees at 28% GST. Real value being 39,060+28% GST With the rate reduction, the MRP would get changed from 50,000 to 46,090 i.e. 39060 +18%GST.
So the manufacturer must ensure this:
1) New production stock has revised MRP published
2) Stickers with revised MRP must be posted on existing stock at manufacturer
3) Stickers with revised MRP must be shipped to distributor/C&F agent demanding mandatory compliance (Loss of distributor may be compensated in other forms via credit note etc)
4) Revised price list effective July 27, 2018 must be sent to distributor for dissemination to dealers/retailers
5) Dealers/retailers must be asked to mandatory comply with new prices by giving customer GST rate cut benefit. (Again credit note by manufacturer may be issued against all such sales if dealer making loss. Chances are most dealers have margin over 8% and hence may be profitable with revised price)
This way consumer has no complaint against the brand. the manufacturer really can drive effective compliance here.
You may implement this for your brand or circulate to others who may be manufacturer of white goods where gst has been reduced.
Any business/brand has finished goods inventory at their factory/warehouse, in transit to distributors/C&F agents, at retailers or online sellers (eCommerce).
Say you are a TV manufacturer in Greater Noida and a particular TV had MRP of 50,000 rupees at 28% GST. Real value being 39,060+28% GST With the rate reduction, the MRP would get changed from 50,000 to 46,090 i.e. 39060 +18%GST.
So the manufacturer must ensure this:
1) New production stock has revised MRP published
2) Stickers with revised MRP must be posted on existing stock at manufacturer
3) Stickers with revised MRP must be shipped to distributor/C&F agent demanding mandatory compliance (Loss of distributor may be compensated in other forms via credit note etc)
4) Revised price list effective July 27, 2018 must be sent to distributor for dissemination to dealers/retailers
5) Dealers/retailers must be asked to mandatory comply with new prices by giving customer GST rate cut benefit. (Again credit note by manufacturer may be issued against all such sales if dealer making loss. Chances are most dealers have margin over 8% and hence may be profitable with revised price)
This way consumer has no complaint against the brand. the manufacturer really can drive effective compliance here.
You may implement this for your brand or circulate to others who may be manufacturer of white goods where gst has been reduced.
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All business community should ensure compliance with GST Anti-Profiteering Law and GST council should ensure through surprise checks.
Jul 24
The subject matter is not related to contributions being made to the nation either by the slum dwellers, middle class or the rich but on profiteering by the business community in the eve of reduction of taxes on consumer items, which more or less affect the interests of of the community as a whole irrespective of their financial status. Therefore, our concern should have been as to how effectively the government and its law enforcing agencies are likely to ensure that the benefit of the tax reduction is honestly passed on to the (classless) consumers instead of making it another prey of profiteering by the greedy dishonest manufacturing & trading community alike in the recent past. I disagree with the views of Mr Bulsara, who is more concerned only about the welfare of his own class, who is comparing himself with the slum dwellers! I am not aware as to whether he ever had a glimpse of life being lived in slums, which is nothing less than living in hell. Had these people the capacity to contribute for the country, they would have not been compelled to lead life in such brutal & insufferable conditions along with their near & dear ones! Still these groups of people are also directly or indirectly contributing to the nation building according to their ability & resources.
Jul 24
In competitive environment the competition ensures that prices are fair. I think we should not worry about such things. There are many better things which can be focussed upon.
Jul 24
Dear Mr. Jain, yes we should contribute to the country and we are by paying the desired tax rate but should taxes be so high? What about the slum dwellers? How much tax do they pay and get away with so much. They are not even contributing to the country's economics and they are going to get free housing??? We pay income tax, gst on every product and pay for our medical bills, hospitalization and what do we get in return? We the middle class are holding up this country so some benefit should be given to us too. This is a case of a Robin Hood government where Robin steals from the middle and rich class and donates it free to the poor for free votes.
Jul 24
