Mom-and-pop stores play the MRP waiting game as new GST rates kick in

ecommerce companies complete technical preparations for the simplified GST structure

Mom-and-pop stores (kiranas) across Mumbai and Kolkata will continue to sell stocks lying in stores at the maximum retail price (MRP) as retailers wait for the new product prices to reach their stores with reduced prices, following the government’s cut in goods and services tax (GST) on many items and the removal of the 12 per cent and 28 per cent slabs. 

In Mumbai suburbs, a standalone supermarket store continues to sell stocks at the current MRP and has no intention to sell at the reduced prices for items that have seen a drop in GST, as the items were billed at the old price. 

“I will first clear the old stocks lying with me, and then once the stock with the new MRP comes in, I will sell it at the reduced MRP,” a storekeeper said. 

Another supermarket, a stone’s throw away, said the same thing. “Dairy items will move quickly, and the new stocks will reach stores within the next 10 days, but items like shampoos will take longer to replenish,” the store owner added. 

Neighbourhood stores around Southern Avenue in South Kolkata are largely billing customers at pre-revision GST rates, which will continue until old stocks run out. Shopkeepers say they are running on low inventory to clear existing goods. But the hitch is that new stock is unlikely to arrive before Durga Puja. 

“So far, there has been no communication from companies on selling products at the revised rates. Customers are enquiring about the revised rates. Let’s see what happens on Monday,” said Kamal Kishore Gupta of Fula Stores. 

It is very unlikely that companies will deliver goods now when Durga Puja is just days away, said Narayan Chandra Malakar of Krishna Stores. “Normally it doesn’t happen. We are expecting new stocks to come in only on October 3.” 

In Delhi-National Capital Region (NCR), while retailers await new stock at new MRP prices as announced by fast-moving consumer goods firms, many are offering massive discounts and schemes to customers in a bid to liquidate old stock as soon as possible and drive up sales. 

Rajmandir Hypermarket is retailing goods across categories at wholesale rates in a ‘Navratri offer’. 

“We have put almost all products — from soaps to shampoos and namkeen to ketchup to jams, and even loose items — on massive discounts ranging from 7-70 per cent,” said a store manager at one of its outposts. 

Shampoos from brands ranging from Dove to Sunsilk by Hindustan Unilever (HUL), and Pantene to Head & Shoulders by Procter & Gamble, are being sold on buy one, get one offers. 

Perishable items are also selling below old MRPs. Meanwhile, all variants of Haldiram namkeen were retailing at a 10 per cent discount. Some other retailers will start offering older products at reduced prices aligned with the rate cuts. 

“Before the new stock starts reaching us later in the week, we will be passing on the benefits on existing supply by selling them at the new, post-GST MRPs ,” said a retailer in Noida. 

E-commerce in switch mode 

Major Indian e-commerce companies have completed technical preparations for the country’s simplified two-tier GST structure ahead of the shopping season. 

The companies have updated their platforms and trained thousands of their sellers on the new tax codes, which take effect on September 22, just as the industry enters its most lucrative period. 

“We are witnessing a strong revival in consumer sentiment, backed by policy reforms that simplify compliance and enhance transparency. The GST changes are already putting more disposable income in the hands of Indian households, stoking optimism for consumption-led growth. As we step into the biggest festival week of the year, the mood is one of confidence and celebrations,” said Rajneesh Kumar, chief corporate affairs officer at Flipkart group, which hosted its flagship Big Billion Days sale on Sunday night. 

“We welcome the government’s move to reduce GST across a host of categories starting September 22. This will make the upcoming festival season more exciting,” said a spokesperson for Amazon. 

The new framework reduces the current multiple-slab system to just two rates — 5 and 18 per cent. Industry executives said that due to revised GST-rate differentials, shoppers might save at least 10 per cent, amounting to approximately $1 billion over the period. The savings apply particularly to electronics and consumer durables.

 

Inputs from Peerzada Abrar, Ishita Ayan Dutt, Akshara Srivastava, and Sharleen D’Souza