Govt Directs Businesses to Display GST Cut Benefits; FMCG Sector Seeks Strict Monitoring

New Delhi: The Centre has instructed businesses to publish tentative price lists for products—including automobiles and consumer durables—reflecting the impact of the new Goods and Services Tax (GST) rate reforms. These comparative lists will also be uploaded on the GST website to help consumers track the relief they can expect when the new two-slab regime comes into effect on September 22.

The revamped GST structure introduces two main tax rates—5 percent and 18 percent—along with a 40 percent rate reserved for luxury and sin goods. Retailers and dealerships will additionally be required to display both pre- and post-GST prices at their outlets to ensure transparency.

The Central Board of Indirect Taxes and Customs (CBIC) recently convened with industry associations and ministries of heavy industry, consumer durables, agriculture, and pharma to ensure smooth execution of the reforms. Industry representatives agreed to pass on tax-cut benefits to consumers, with prices of consumer durables expected to drop by at least 10 percent and automobiles by 12–15 percent.

FMCG firms have urged the CBIC to introduce strict monitoring to prevent companies from withholding benefits. They also called for directives ensuring accurate stickering and invoicing aligned with the new rates.

Economists project the reforms will provide notable relief: food inflation could decline by 25–35 basis points in six months as essentials like oils, noodles, bread, and prepared meals get cheaper, while core inflation may ease 30–40 basis points with lower rates on soaps, toothpaste, medicines, and household appliances.

According to a Bank of Baroda research report, GST reforms could reduce headline inflation by up to 75 basis points and release as much as ?1 lakh crore in additional consumption spending.

With inputs from IANS