Eateries may land in soup for profiteering post GST

November 18, 2017 10:19

Unhappy with the price hike introduced by restaurants after a steep reduction in the goods and services tax , the government is looking to invoke anti-profiteering provisions.

While restaurants are free to alter prices on account of higher costs, most have said the latest hike was the result of the GST Council's decision to do away with input tax credit while lowering the levy from 18% to 5%.

"If the impact of withdrawal of input tax credit is a sharp increase, they should have also reduced prices by a similar margin when GST was introduced in July. It is a fit case of anti-profiteering action," a senior finance ministry official said.

The official said the law allowed the government to take suo motu action apart from acting on specific complaints. "We will levy the maximum possible penalty if profiteering is established," the source, who did not wish to be identified, added.

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