What is happening? One of the more contentious provisions in the goods and services tax (GST) framework is coming home to roost: See-sawing GST rates from last year have created a shadow of “profiteering” on India’s consumer-goods companies. The government has begun asking firms to pay up for having made undue profits by not lowering the prices of several goods
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tax rates. This is because, as noted above, the anti-profiteering law does not specify how and by when prices should be dropped after taxes are lowered. However, companies seem to have reconciled to the regime for the time being — most have already made back-of-the envelope calculations on how much they might owe in “profiteered” margins, this source says.