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Goods and Services Tax and Price Control Measures: Lessons for India from Australian Experience

Author

Listed:
  • Sthanu R. Nair

    (Indian Institute of Management Kozhikode)

  • Leena Mary Eapen

    (Indian Institute of Management Kozhikode)

Abstract

The Model Goods and Services Tax (GST) Law which would guide the implementation of GST in India has incorporated an "Anti -profiteering" clause aimed to ensure that the businesses pass on to the consumers the cost savings resulting from the adoption of GST. The responses from the businesses and commentators to the inclusion of this clause have been skeptical. In this context, the objective of this paper is to study Australia's experience with price monitoring during the GST transition period and draw suitable lessons for India on the feasibility of implementing anti-profiteering measures in the Indian context. The paper finds that, following Australian model, it is possible to institute a comprehensive and effective price monitoring mechanism in India to ensure that consumers receive the full benefits from GST introduction in the form of lower prices expected due to tax reductions, input tax credits received by the businesses and reduction in compliance cost.

Suggested Citation

  • Sthanu R. Nair & Leena Mary Eapen, 2017. "Goods and Services Tax and Price Control Measures: Lessons for India from Australian Experience," Working papers 227, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:227
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    File URL: https://iimk.ac.in/websiteadmin/FacultyPublications/Working%20Papers/227abs.pdf?t=29
    File Function: First version, 2016
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    More about this item

    Keywords

    Good and Services Tax; Price control; India and Australia;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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