A Kerala based sewing machine dealer was in a fix when post-GST prices of leading brands fell. But his brand, contract-manufactured in Ludhiana, became costlier. Big brands reduced prices because of a cut in the effective rate of taxation due to the now available input credits.
The Ludhiana-based supplier, however, claims that instead of two per cent state VAT, he is now paying 12 per cent GST. He is either failing to avail input credit or not passing it on to his customer, the machine dealer. Although there is an anti-profiteering authority proposed under GST, can it make quick interventions for such situations? It may well be possible that the price increase in thousands of products manufactured and marketed by small and medium enterprises, is a short-term phenomenon.
But it still raises the question whether the Centre or states will be able to tackle complaints. Haryana has already recorded 43 cases until mid-October. Urgent intervention is clearly the need of the hour.
Joe C Mathew