What Is The Anti-Profiteering Clause?
The Anti-Profiteering Authority of India has established the anti-profiteering clause to keep in check businesses that hike prices citing GST as the reason.
Why Is It Needed?
Anti-profiteering measures were adopted after the advent of GST led to an inflationary rise in Malaysia, Singapore, and Australia. Producers did not pass on the benefits of GST to consumers even with reduction in the rate of tax or Input Tax credits being handed over to them.
To deal with this unfair spike in prices, a formula was devised to compare the net profit margin before GST to the post-GST margins to see if returns had added to the bottom-line.
The returns were calculated after determining the supplier’s costs, market forces/conditions etc.
How Can This Help Homebuyers?
Developers cannot inflate the prices of their inventory citing GST. A homebuyer can contact the anti-profiteering authority if they experience such illicit dealings from a developer.
The committee is still in commencement stage, since it has been only a few months since the implementation of GST. Rest assured, the anti-profiteering clause will keep illegal price-inflations at bay.