E-commerce firms in India may face tax audit on GST rate cuts

India’s National Anti-Profiteering Authority has asked the director general, audit, to check whether e-commerce companies have passed on cuts in goods and services tax (GST) rates to consumers. 

The GST Council had slashed tax rates on many household goods to 18 per cent in November last. More products were shifted to a lower slab or fully exempted recently.

Tax authorities have been monitoring companies to ensure rate cuts were being passed on to consumers, with several of them, including Nestle and Hindustan Unilever, paying excess amounts collected to the government for the consumer welfare fund, according to a report in a top Indian business daily.

Others that received notices were Jubilant FoodWorks (Domino’s Pizza), Hardcastle Restaurants (McDonald’s), retailer Lifestyle International and auto firm Honda Motor.

Tax experts say e-commerce companies should look at the aspect of refunding excess tax to consumers.