Section 171(1) casts responsibility to pass on the benefit of GST to the recipients. ITC on all inputs can be adjusted against output tax.It is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer as an anti-profiteering measure
The Authority will determine the method and procedure for determining whether the reduction in rate or the benefit of input tax credit has been passed on by the seller to the buyer by reducing the prices.
Duties of the Authority–
- Determine whether the reduction in tax rate or the benefit of input tax credit has been passed on by the seller to the buyer by reducing the prices.
- Identify the taxpayer who has not passed on the benefit
- The Authority will exist for 2 years from the date on which the Chairman enters upon his office unless the Council recommends otherwise.
The reason behind such anti-profiteering measures is to protect the masses, the government should also ensure honest taxpayers are not harassed by these provisions.