{"id":1300182,"date":"2025-09-13T10:54:27","date_gmt":"2025-09-13T05:24:27","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1300182"},"modified":"2025-09-13T10:55:13","modified_gmt":"2025-09-13T05:25:13","slug":"fmcg-firms-refuse-to-lower-price-of-low-value-products-after-gst-cuts","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/fmcg-firms-refuse-to-lower-price-of-low-value-products-after-gst-cuts\/","title":{"rendered":"FMCG Firms Refuse To Lower Price Of Low-Value Products After GST Cuts"},"content":{"rendered":"\n

Consumer goods companies have told the Central Board of Indirect Taxes and Customs (CBIC) that they cannot reduce retail prices of low-value products in line with GST cuts, arguing that lowering MRPs would disrupt the widely accepted Rs 5, Rs 10, and Rs 20 price bands<\/strong> in the Indian market. Instead, firms plan to increase pack sizes<\/strong> to pass on tax benefits.<\/p>\n\n\n\n

\"FMCG<\/figure>\n\n\n\n

Why Prices May Not Drop<\/h3>\n\n\n\n

For example, biscuits previously priced at Rs 20 included 18% GST. With the new 5% GST slab effective<\/a> September 22, the MRP should technically drop to around Rs 18. However, FMCG companies believe that pricing at Rs 18 is not consumer-friendly, as buyers are accustomed to round-number price points.<\/p>\n\n\n\n

A senior executive explained that reducing MRPs could inconvenience consumers and disrupt sales patterns. To maintain familiarity, manufacturers intend to keep sticker prices intact while increasing the quantity of goods sold.<\/p>\n\n\n\n

Pack Size Adjustments<\/h3>\n\n\n\n

Rishabh Jain, CFO of Bikaji Foods, confirmed that the company will increase \u201cgrammage\u201d in impulse packs\u2014small packs that drive spontaneous purchases\u2014to fully pass on GST benefits. Similarly, other FMCG giants like Dabur have assured that consumers will benefit, though largely through larger packs rather than lower prices.<\/p>\n\n\n\n

Government\u2019s Response<\/h3>\n\n\n\n

Officials in the Finance Ministry are examining whether to issue guidelines<\/strong> to prevent \u201cunintentional profiteering\u201d by companies. Although there is currently no formal mechanism to monitor this, the government has indicated it may introduce oversight if benefits are not adequately passed on.<\/p>\n\n\n\n

The 56th GST Council meeting<\/strong> approved a simplified structure with three slabs:<\/p>\n\n\n\n