Prices remain high despite tax cuts; people await central intervention

THIRUVANANTHAPURAM: Even though the GST rates were sharply reduced on September 22, prices of most products have not come down. Companies and retailers are pocketing the benefit instead of passing it on to consumers. The central government has warned that it will intervene if the situation continues. State governments also agree with this view. The Centre has issued strict instructions to 800 brands and companies to close this gap and pass on the tax benefits to consumers before October 20.

According to a random survey conducted by the Central Board of Indirect Taxes and Customs, there was a 100% price reduction in the automobile sector. However, only a 40% reduction was seen for soaps, shampoos, and packaged foods, 65% for electronic products, and 48% for insurance services. There are also allegations that some major e-commerce platforms are manipulating the MRP (Maximum Retail Price). The central tax board is preparing to take strict action.

Different prices in different regions

• The state GST department found that the same product is being sold at different prices in different regions. Only a few items, like bottled water, have seen real price reductions.
• Some traders have passed the full benefit of the tax cut to customers, while others have done so only partially. A few claim they were not even aware of the changes.
• Companies say that consumers may have to wait until November to see the full benefits of the revised rates.

Customers being cheated in name of discounts

In ready-made garments, instead of lowering prices after the GST reduction, many shops are selling products under the label of “discount.” The price of a 2 kg pack of Aashirvaad Atta was supposed to drop from Rs 136 to Rs 121, but it is still being sold for Rs 129–Rs 131. The price of Amul butter (100g) was expected to fall from Rs 62 to Rs 58, but traders are charging Rs 59– Rs 60.

Where to complain

Consumers can report such issues through:

• National Consumer Helpline – 1915
• WhatsApp – 8800001915

“Since the GST rate cuts were implemented without enough preparation, the expected benefits have not reached the public. At the same time, the state’s tax revenue has fallen. If the central government does not act carefully, this could backfire.”

— K. N. Balagopal, Finance Minister