Rs 170 crores deposited in consumer welfare fund by entities for not passing GST benefits

As much as Rs 170 crore has been deposited into the consumer welfare fund by several entities for not passing on the benefits of GST rate reduction to consumers, Kerala Finance Minister Thomas Isaac said Friday.

The Central GST Act provides for the creation of a Consumer Welfare Fund wherein undue benefits made by businesses under the GST law have to be deposited, in case it cannot be passed on to the identified recipient.

"Action has started (on profiteering complaints)... Rs 170 crore has been paid in the Consumer Welfare Fund by the companies and many cases are being investigated," Isaac told reporters here.

The government has a national anti-profiteering authority to penalize businesses for failure to pass on GST benefits to consumers. In case the consumer is not identifiable, the money has to be deposited in the consumer welfare fund.

As per the GST anti-profiteering rules, the Centre and the 'concerned state' has been empowered to equally share the amount deposited by erring businesses in the consumer welfare fund.

'Concerned state' would mean the state where the anti-profiteering authority has passed its order against the businesses.

The proceeds from the consumer welfare fund, constituted under the Goods and Services Tax (GST), can be given as a grant to the Centre and state governments as well as regulatory authorities.