New Delhi, Sept. 22 -- As the biggest reform in India's goods and services taxes (GST) rolls out today, the Centre will be monitoring whether companies actually pass on the tax cuts or keep the gains to themselves. The government will keep a "discreet oversight" on how the tax cuts unfold, but avoid any intrusive use of administrative machinery, two persons privy to official discussions said. However, it will not hesitate to put in place a formal mechanism if corporate profiteering manifests. The Centre is optimistic that businesses will honour their public commitments to reduce prices, but the option of a formal enforcement mechanism has not been ruled out if consumers fail to see the relief, the people cited above said on the condition of anonymity. The tax cuts followed Prime Minister Narendra Modi's promise of tax relief in his Independence Day speech. Finance minister Nirmala Sitharaman has committed to ensuring that the benefits reach households. All government departments are conscious of the need to ensure consumer benefit and will be watching prices, one of the two persons cited above said. The government's engagement with the industry will be of "vigilance and gentle persuasion" rather than invoking any administrative powers, the person added. "If profiteering conduct is seen, the government can bring in the Competition Commission of India (CCI) at any time to address that. However, at the moment, that is not contemplated, and the signals coming from the industry indicate price reductions to pass on the benefit of the GST rate cut to consumers," the person said. Queries emailed to the finance ministry on Friday remained unanswered. In the early days of GST, there existed a formal mechanism to check companies pocketing the gains of tax cuts; however, that system ended in April this year. The principal bench of the GST Appellate Tribunal will continue to adjudicate on past cases, but no fresh complaints are being accepted by any authority. Creating a short-term regulator to monitor profiteering is impractical because it would be difficult to wind it up later, the person cited above said. "To ensure retailers pass on the benefit of the rate reduction to the final consumers, businesses have been advised to take steps, including instructing dealers to ensure the price charged to the consumer reflects the tax reduction. They also have the option to affix stickers about the revised price. These steps are expected to ensure that retailers pass on the tax cut benefit to the consumer, said the person. The government's confidence about businesses lowering prices to reflect the GST rate reduction is backed by the proactive announcements made by companies through statements and newspaper advertisements. Chandrajit Banerjee, director general of Confederation of Indian Industry, said the industry body is encouraging members to ensure the tax cuts are passed on swiftly and transparently....