Companies might have to face certain serious implications if their retailers fail to immediately cut the prices of the products whose taxes have been slashed recently. Union Finance Secretary Hasmukh Adhia said that neither the retailers nor the companies can carry on selling products at higher prices on the basis that the old stocks are still present.
“We have made provisions for the companies to claim the difference from the government as input tax credit. But I am not willing to accept their argument to postpone passing on the benefits to consumers till they have disposed of their old stocks.” According to him, the revamped prices should’ve got effective from November 15. In the last meeting, the GST Council decided to slash the rates of 176 items from 28 percent to 18 percent. Also, the rates on two products were further reduced to 12 percent.
“We cannot track each retailer. So we have made it clear to manufacturers like FMCG companies that the onus is on them to ensure the retailers immediately pass on the benefits to the consumers if they want to escape action under the anti-profiteering clause of the GST.” In a recent interview with Doordarshan, Dr Adhia stated that a huge demand was there to cut the rates.
Also, he has advised the companies to “transparently” promote their revised rates in newspapers so that the masses can realize the extent to which the prices have come down. The items which have witnessed a reduction in taxes include, but aren’t limited to, detergents, sanitary ware, suitcase, beauty products, chocolates, marble and granite, wall paper, plywood, and stationery articles. “It is the responsibility of companies to inform their supply chain about the new price, going all the way down from distributors to wholesalers and retailers if they wish to escape the glare of anti-profiteering action by the government.” He added further to his statement by saying that the ministry of consumer affairs has agreed to grant the elbow-room to manufactures in order to modify the maximum retail prices by the month of December. “But this does not mean they can wait till December. The new prices have to become effective immediately.”