Reduced rates applicable immediately
Post reduction of rates on numerous items, the retailers need to be cautious while selling products. The issue involved is that good in store are tagged at higher GST rates, and till the time stocks are cleared or sold, the same higher rates are charged to the consumers. The manufacturing companies, including FMCG firms, might be prosecuted if their retailers do not immediately cut the prices of products whose tax rates have been slashed.
Union Finance Secretary Hasmukh Adhia says the retailers or the companies cannot continue with higher prices on grounds that the old stocks have not been exhausted.
“We have made provisions for the companies to claim the difference from the government as input tax credit. But I am not willing to accept their argument to postpone passing on the benefits to consumers till they have disposed of their old stocks.”
According to him, the new prices should be effective from November 15.
The GST Council in its last meeting this month cut the tax rate on 176 items from 28 per cent to 18 per cent and on two to 12 per cent.
“We cannot track each retailer. So we have made it clear to manufacturers like FMCG companies that the onus is on them to ensure the retailers immediately pass on the benefits to the consumers if they want to escape action under the anti-profiteering clause of the GST.”