Consumer industry executives ask government to monitor price changes

Industry bodies highlight issues in GST implementation, seek further clarity

In a meeting with the CBIC chairman on Wednesday, executives from consumer-facing industries including FMCG asked the government to monitor prices after the new goods and services tax (GST) rates become effective to ensure benefits are passed on to consumers.

 

Executives have also requested CBIC to issue directives to all FMCG companies to implement the rate change effectively with proper stickering and revised invoicing, while adding that prices of goods in the market are monitored closely for the next six months.

 

Executives also relayed 'potential' bottlenecks arising in implementing the new GST rate cuts. “The meeting was held to understand any implementation problems we have in light of the GST rate cuts announced last week,” said one of the senior executives who attended the meeting, requesting anonymity. 

   

Executives have sought clarity on input tax credit adjustment, while also highlighting anomalies in HSN codes for some products.

 

The GST rate reduction to 5 per cent from 12 per cent and 18 per cent earlier, will generate excess ITC credit for distributors. This still needs to be clarified.

 

They also sought clarification on anomaly in GST rates for similar products under different HSN codes  

 

While the rate of GST on detergent cakes under HSN Code 3401 has been reduced from 18 per cent to 5 per cent, the rate on detergent powder under HSN Code 3402 continues at 18 per cent. However, these products are substitutes, which cater to the same consumer base, they stated.

 

The Department of Consumer Affairs, in a notification issued on Tuesday, had stated that companies can declare the revised MRP until December 31, 2025, or until the old stocks are cleared, whichever comes earlier. The revised MRP may be applied through stamping, stickers or online printing, as appropriate.

 

However, the original MRP should be displayed and cannot be overwritten and the difference between old and revised price should reflect only the actual increase or reduction in tax due to the GST changes.