The Chairperson of the Central Board of Excise and Customs (CBEC) Vanaja Sarna has asked the Fast Moving Consumer Goods (FMCG) companies to revise the maximum retail price (MRP) with immediate effect in order to accommodate the latest reductions being made in GST rates.
The GST Council had decided to reduce the rates on 178 items to 18 percent from the previous rate of 28 percent. This change was supposed to become effective since November 15.
In the letter which was sent to all major FMCG companies, Ms. Sarna has specifically addressed the need to instantly revise the MRP on all those products whose taxes have been reduced recently. "She has also requested all to give wide publicity to the revised MRP of products. The Government expects that the industry should immediately respond to the earlier appeal made by the Finance Minister on this issue," a statement by the finance ministry said.
The Council, after getting continuous requests from the masses, has revised the rates of a wide variety of products. Numerous items which were previously taxed at 18 percent will be charged at 12 percent and the ones which attracted 12 percent tax will now fall under the bracket of 5 percent.
"The benefit of reduction in the GST rate has to be passed on by the suppliers to the consumers by way of commensurate reduction in prices. The reduction in GST rates is also expected to encourage domestic demand and investment," the ministry said.
The items which have been shifted to 18 percent tax bracket from 28 percent one include chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing powder, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress.