From releasing ads informing consumers about revised prices to deploying software to closely monitor billing and invoicing at retail stores, consumer goods companies are trying to ensure that their products reflect the reduced rate of tax at the shop level.
Fast Moving Consumer Goods (FMCG) companies including ITC, Dabur, HUL and Marico, have announced that they have slashed prices of various products to pass on the benefits of the GST rate reduction to end-consumers.
GST rate was reduced on 178 items, including detergents, shampoos and beauty products, from 28 percent to 18 percent from 15th of November. GST rates on a number of items have also been reduced from 18 percent to 12 percent and from 12 percent to 5 percent.
The government had made it clear that it was the responsibility of the companies to ensure that their entire retail chain followed the directives on pricing. If a trader is not selling an item at the revised MRP, then the company will have to respond to the National Anti-Profiteering Authority on it.
CBEC Chairperson Vanaja Sarna on Monday in a letter to all major FMCG companies had pointed out the need to immediately revise the MRP on all the products for which the tax reductions have been announced by the GST Council.
The companies said yesterday that they will extend the price reduction to other categories, which have also seen tax rate cuts. The development comes after the government asked the firms to pass on lower GST rates to consumers.
Finance secretary Hasmukh Adhia has said if a trader was not selling an item at the revised price, action could be taken against companies as they were the ones who decide the MRP.