Reduced GST should reflect in prices too

The central government reduced the GST rate on September 22 as a Diwali gift to the people. Although the prices of many consumer goods should have come down significantly due to this, the GST officials themselves admit that prices have not come down in many places. Now, many goods have different prices in different places. When people complain, traders usually say that they bought the goods before the GST rate was reduced. There has been no necessary intervention from the central government so far, although the complaints of people that the benefit of the GST rate reduction is going to the pockets of retailers in many places have been reported in the media.

The Centre has issued strict instructions to 800 brands and companies to close the price gap and pass on the tax benefits to consumers before October 20, but this will not do. This instruction should also be given to retailers. The Union Finance Department should also publish a notice in the form of advertisements stating that action will be taken against those who do not comply. There has been a price reduction for large products purchased directly from showrooms, including cars. A random survey conducted by the Centre has clearly shown that 100 percent of the price reduction was reflected in this sector. However, this has not been sufficiently reflected in the sale of small products. The price reduction was implemented by only 40 percent for soap, shampoo, packaged food, etc., 65 percent for electronics products, and 48 percent for insurance. So, the GST authorities themselves need to clarify where the profit that should be received by the consumer is going.

Some retailers are committing fraud by illegally raising the base price of goods and falsely claiming to have reduced the GST. In addition, there are allegations that there is a discrepancy in the MRP on leading e-commerce platforms. Fraud is also being committed in the name of discounts. Instead of reducing GST on ready-made clothes, many places are selling them with a 'discount'. It was said that a two-kilogram pack of a particular brand of atta would cost Rs 136 and would be reduced to Rs 121, but it is still being sold in the market for Rs 129-131. Although the company had announced that the price of Amul butter would be reduced from Rs 62 to Rs 58 per 100 grams, it is being charged at Rs 59-60 in many places.

Although the inspection of the state GST department has found that different prices are being charged for the same product in different parts, no action has been taken against anyone. Past experiences related to the retail sector show that most people will not be willing to voluntarily comply with the law unless they are convinced that action will be taken and that they will have to pay a fine if they sell products without reducing the price. Before conducting widespread inspections, the GST authorities should take steps to create awareness and warn traders. If some people are still pocketing the tax shortfall, strong action should be taken against them, including cancelling their licenses.