Govt seeks monthly reports on pricing after GST rate cuts from Sep 22

In the circular, which is seen by Business Standard, the CBIC directed principal chief commissioners to compile commodity-wise price data from trade associations

The Central Board of Indirect Taxes and Customs (CBIC), in a circular dated September 9, has asked its field formations to monitor and submit monthly reports on price changes of everyday goods such as butter, cheese, shampoo, toothpaste, biscuits, chocolates, cement, and medicines after the goods and services tax (GST) rate rationalisation kicks in from September 22. 

In the circular reviewed by Business Standard, the CBIC directed principal chief commissioners to compile commodity-wise price data from trade associations and field units, both before and after the new rates are implemented. The exercise will continue for six months to check whether the benefit of lower GST rates is being passed on to consumers. 

The first set of reports must be sent by September 30, followed by monthly updates by the 20th of every subsequent month till March 2026, according to the circular, which has listed 54 items, ranging from dairy products such as butter, cheese and ghee, to packaged foods like biscuits, chocolates and ice cream. It also covers toiletries, including soaps, shampoos and toothpaste, along with big-ticket goods such as cement, medicines, bicycles, toys, and consumer durables like televisions and air-conditioners. A government official, who didn't wish to be identified, indicated that the Centre’s focus is on daily-use items, and the field units will engage with trade associations to nudge businesses to pass on the benefits. They will also independently monitor compliance.

“Field formations will also check directly in the market and not just rely on data provided by the trade associations or industry bodies,”  the official told Business Standard. 

According to Abhishek Jain, indirect tax head & partner, KPMG, this directive aligns with the broader narrative of the government, which has consistently emphasised on the need for industry to ensure that the benefit of GST rate reductions is passed on to the consumers. 

“With expectations of close monitoring by the authorities, businesses would be well advised to proactively revisit their pricing and implement robust mechanisms to ensure that the benefits of the rate revisions are appropriately and transparently passed on,” Jain said. 

Meanwhile, Pratik Jain, partner at Price Waterhouse, said even without a specific complaint mechanism, the government is keen to ensure that the GST benefits are passed on to the customers.  

“While it is a trust-based system, the industry needs to be ready with adequate documentation, including communication to customers as to how the benefits are being passed on,” he added. 

Ensuring transmission

• Monthly reports on price changes are mandated to ensure benefits are passed to consumers
• Trade associations and field units will provide commodity-wise price data for six months
• The first report is due on September 30, with subsequent reports due monthly until March 2026