E-commerce companies such as Amazon and Myntra are likely to face an audit by tax authorities to check if they have passed on cuts in goods and services tax (GST) rates to consumers.
The National Anti-Profiteering Authority has directed the director general, audit, to conduct the examination.
The GST Council had slashed tax rates on a host of household products such as chocolates, toothpaste, shampoo, washing powder and shaving creams to 18 per cent from 28 per cent in November last year. More products were shifted to a lower slab or fully exempted at the GST Council’s latest meeting.
Tax authorities have kept a close watch on companies to ensure that rate cuts were being passed on to consumers, with several of them paying excess amounts collected to the government for the consumer welfare fund. They include Nestle and Hindustan Unilever.
Others that got notices were Jubilant FoodWorks (Domino’s Pizza), Hardcastle Restaurants (McDonald’s), retailer Lifestyle International and auto firm Honda Motor, EThas reported previously.
The government carried out a campaign to educate consumers about the tax cuts and what they could do if they found shopkeepers were not complying.
Tax experts say it’s important for ecommerce companies to look at the aspect of refunding excess tax to consumers.
Incidentally, the anti-profiteering GST watchdog recently gave relief to Flipkart in a significant ruling on a complaint dealing with voluntary discounts offered by sellers on the platform.
The discount, the authority said, was offered out of the supplier’s profit and GST was charged at the appropriate rate and there was no case of antiprofiteering.