Any profiteering will be decided on a product basis, not earnings at an entity level. So, if a company is into four product lines and having losses but profiteering on one of its products, it will be held liable.
Currently, there is no provision under indirect tax laws to penalise those not passing on tax-related benefits to consumers. The GST
legislation says doing so is mandatory.
The anti-profiteering panel will be set up by the GST
Council, comprising officials from both the Centre and states. "The body will lose its meaning after a year but a definitive time frame might not be provided," said the official.
The Centre already has a consumer welfare fund, operated by the department of consumer affairs. Set up in 1992, it is credited with money that is not refundable to manufacturers. As of 2014, around Rs 17 crore was available. It essentially is to provide financial help to promote welfare of the consumer, create consumer awareness and strengthen the consumer movement.
Under GST, a common fund for all states or common for Centre and states is envisaged, for anti-profiteering. "The profiteered amount cannot be given to consumers directly. So, it will be best to deposit it with the consumer welfare fund," said the official.