Amidst growing instances of consumer complaints regarding high prices of common use products, despite massive reduction in GST slabs, Govt has now ordered all FMCG companies to revise their MRPs, with immediate effect.
In a related news, it has been reported that GST on white goods, especially refrigerators, washing machines will come down soon 28% slab.
This means further reduction in prices of commodities, and more savings for the common man.
But the question is.. When will GST stabilize?
Govt To FMCG Firms: Update MRPs Now!
Right now, India is in the middle of GST reforms, and tax structure is changing almost daily.
Taking advantage of this chaos, several retailers and traders are charging extra from consumers. Govt. has taken note of this tendency, and has swiftly ordered all FMCG companies to immediately update their prices without fail.
Failure to do so can attract punishment under anti-profiteering laws.
Central Board of Excise and Customs (CBEC) chairperson Vanaja Sarna has written to all FMCG firms regarding this order.
In a statement by Finance Minister, it was said:
“She has also requested all to give wide publicity to the revised MRP of products. The government expects that the industry should immediately respond to the earlier appeal made by the finance minister on this issue,”
The new GST rates are applicable effective November 15th, after GST Council removed 177 items from 28% slab, and have kept only 57 items in the highest tax slab.
Tax slab for these items have been reduced to 18% from 28%: chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress.
Tax rates for these items have been reduced to 12% from 18%: condensed mil, refined sugar, pasta curry paste, diabetic food, medical grade oxygen, printing ink, hand bags, hats, spectacles frame and bamboo/cane furniture.
And in the top bracket of tax, these items have been losted: white goods, cement, paints, luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products.
Finance secretary Hasmukh Adhia has already stated that if FMCG firms continue to charge extra then strict action would be taken. Last week, he had said,
“I again want to appeal to FMCG companies that if they want to be safe from anti-profiteering action then they have to ensure that their whole retail chain is informed and immediately pass on the effect of reduction of tax rate from 28% to 18% to consumers,”
Interestingly, GST Council has already formed a committee to take action against those businesses which are charging more in the name of GST. It is not yet clear whether this special committee, called National Anti-Profiteering Authority will take any action or not.
GST On White Goods To Be Reduced
White goods such as Refrigerators, Washing machines are currently under 28% tax slab under GST, which will soon change.
Consumer durables market is facing a slowdown due to increased taxes under GST, and excess production and unsold inventory is now a common story for the industry.
Modi Govt is receiving tremendous amount of complaints and anger regarding high taxes for white goods, and things can change very soon.
Reacting to this speculation, M S Mani, a partner at Deloitte India said,
“All consumer durables, if taxed uniformly at 18%, would give a big fillip to domestic manufacturers as this would also lead to a significant price reduction, leading to increased demand”.
We will keep you updated as we receive more news regarding GST for white goods.
Stay tuned!