While GST laws include anti-profiteering measures (which say that the benefits of the reduction in the tax rate and input credit shall be passed on by a commensurate reduction in prices and the government may appoint an authority/empower an existing authority to monitor profiteering), we believe such measures are difficult to implement and would be a retrograde step, similar to price controls, if implemented in haste.
First, it would be difficult to assess the commensurate price cuts (due to difficulties in the estimation of the benefits of GST). Second, the government may not have sufficient bandwidth to check / monitor the pricing/profitability of the entire gamut of tax-paying entities. In our view, pricing / profitability would be driven more by industry dynamics, rivalry and competitive intensity than by government directives on price cuts.
via GST impact on corporates, economy, real estate and markets | Business Standard News
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