Published: Tue, November 21, 2017
World | By Paul Elliott

FMCG firms slash prices post GST reduction

FMCG firms slash prices post GST reduction

FMCG major Dabur on Tuesday said it has cut prices of existing stocks across categories such as shampoos, skin and home care by 9 percent following reduction in GST rates.

The GST Council had made a decision to bring down the GST rate on dining out to 5%, but had simultaneously disallowed restaurants from claiming input tax credit.

The government is looking at reducing the incidence of tax on white goods such as refrigerators and air-conditioners under the goods and services tax from the current levels of 28 per cent with a view to increase consumer demand and thereby improve tax collections.

The GST Council in its 23rd meeting held on November 10 at Guwahati had recommended the reduction of the GST rate from 28 per cent to 18 per cent on goods falling under 178 headings, leaving now only 50 items under the GST slab rate of 28 per cent. However, an Input Tax Credit which was given to restaurants will now be withdrawn.

"In order to pass on this tax benefit to consumers, Marico has effected MRP reductions on products across categories such as deodorants, hair gels, hair creams, body care etc", Marico Ltd CFO Vivek Karve told PTI.

The government wants to ensure that the prices of the products on which GST rates have been slashed should come down by 8 to 9 percent. There are only 52 items which attract a GST rate of 28 percent now.

"We can not track each retailer".

Adhia further requested companies to advertise in newspaper explaining the rate cuts on the products. Items on which tax rates have dipped include detergents, sanitary ware, suitcase, beauty products, chocolates, marble and granite, wall paper, plywood, and stationery articles.

On concerns over small businesses coming under the lens of the anti-profiteering authority, Mr Adhiya also said it will take action only against big organised sector companies because they have the full retail chain and they decide the MRP.

"But this does not mean they can wait till December".

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