Food companies and retailers have prepared their strategies to align with the revised structure. At snacks major Haldiram’s, larger packets will see markdowns while smaller ones will carry extra weight to match the tax cut.
“We have a mixed policy. The packets above 200 grams will now cost less. However, there is little change or cutting the rates in smaller ones, so we would just increase the quantity,” an official at Haldiram’s told Times of India (TOI).
Nagpur’s Ajit Bakery has adopted a similar approach. “Even our plan is to increase the weight, giving around 10% more at the same old rates,” TOI quoted Vikram Diwadkar of Ajit Bakery as saying. The GST on fast-moving consumer goods (FMCG) has been cut from 18% to 5%.
Distributors noted that manufacturers have already passed on the benefit. “So even if the MRP remains the same, the rates have actually gone down. The retailers are being supplied goods with old MRP tags at cheaper rates. Now, it is up to them to sell products at reduced rates to the end consumers,” said Sunil Bhatia of the Consumer Products Dealers Association to TOI.
Electronics dealers also expect demand to rise. “The companies have already cut the prices, and the retailers are ready to pass it on to the consumers. A reduction of 7.8% is expected in the prices of air conditioners. For example, those in the range of Rs60,000 would be cheaper by Rs3,500 from Monday,” said Santosh Taori, an electronics dealer.Pankaj Malhotra of the Association of Nagpur Electronic Dealers said, “The GST has been slashed by 10% on items like televisions, air conditioners, and similar goods. For example, high-end televisions of Rs2 lakh and above would be cheaper by around Rs20,000. On average, a reduction of Rs5,000 to Rs10,000 is expected.”However, not all sectors are upbeat. Notebook makers said that while GST on notebooks has been reduced to zero, the tax on paper — the raw material — has increased from 12% to 18%, raising production costs.
BC Bhartia, president of the Confederation of All India Traders (CAIT), urged the government to stay alert. “The anti-profiteering cell of the GST department should remain vigilant to ensure that the tax cut is passed on to the consumer. If the rates are cut, the new prices have to be adjusted accordingly. The officials must ensure by visiting the retailers and dealers that items are being sold at reduced prices,” TOI quoted Bhartia as saying.
(With inputs from TOI)
as a Reliable and Trusted News Source