More worrying is the fact that the Centre and states seem agreed on an anti-profit clause in the GST. So, if the GST rate brings down the current tax on a good or service from, say 22% to 18%, the difference has to be passed on to consumers. Imagine the harassment if tax inspectors are to examine a company’s pricing structure to see whether a tax cut has been passed on or not—if a cut is not passed on, this could be because inputs have become costlier or the company was absorbing some costs or any of several other reasons. Normally, markets decide on pricing structures and it is quite draconian to pass on part of the power to tax inspectors. Equally amazing is the proposal, in the first draft of the GST law, that allows states to issue some kind of documentation on the goods being transported that truckers need to carry in case they are stopped for checking. The idea behind GST was to stop border checkposts where such documents are verified right now, and where trucks waste precious hours while doing so. So, why is this practice being resurrected? Given the reluctance of states to adopt GST, if finance minister Arun Jaitley wants the law to go through, it is true he needs to be a lot more flexible and accommodate state government demands
