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Watchdog to guard GST intro

THE Australian Competition and Consumer Commission has released draft guidelines on pricing under a GST for public comment.

The commission has been tasked with making sure all savings from indirect tax abolition are passed on to consumers.

ACCC chairman Alan Fels said consumers should not be exposed to greater than necessary price rises and should not be exploited.

“The proposed GST legislation requires the ACCC to formulate guidelines as to when prices may be regarded as being in breach of the price exploitation provisions,” Professor Fels said.

“While the legislation is yet to be passed, the guidelines need to be developed before July 1 to ensure objectives are achieved since tax changes are expected to occur soon after that date.”

Professor Fels said during the transition period the ACCC would only look at the price changes resulting from the GST – not the level of prices.

“The ACCC is only interested in the response of business to the tax changes. It is not intended the ACCC assess how reasonable or otherwise the level of prices may have been,” he said.

“While prices may reflect the effect of the GST, no profit markup may be applied to it.”

The public comment period closes on May 11.

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