From Wednesday, consumers would do well to check their shopping bills closely. A host of packaged products such as chocolates, toothpastes, shampoos and shaving creams – with the maximum retail price printed on them – is set to become cheaper following a steep reduction in the goods and services tax.
Some companies manufacturing these products have asked traders to pass on the tax cuts to consumers immediately, without waiting to put revised maximum retail price stickers on them or printing new packs, both of which would take time.
A watch company and a printer maker plan to inform customers about the price reduction through newspaper advertisements. Still, consumers should be aware that not all companies may implement the price cuts right away.
The changes will affect a large number of products that are already in stores or on their way there. Pasting stickers with revised prices can be done only after the government gives the go ahead. Apart from taking time, some companies said pasting stickers costs the same as printing packs with the revised prices.
The maximum retail price of a product includes taxes and unless a company increases the base price or raises the margin for distributors and dealers, these products should become cheaper. The government is yet to issue fresh guidelines on pasting stickers with the revised prices.
The GST Council reduced the tax rate on about 200 products, of which 178 were moved to 18 per cent from the 28 per cent slab, at its 23rd meeting on November 10. The new rates are effective from midnight Tuesday, with both the states and the Centre issuing notifications.
“However, given the paucity of time, most companies have not been able to reduce the MRP of products but have communicated to dealers and retailers that prices should be brought down.” Consumers need to be aware about what prices are likely to come down and by how much, irrespective of the MRP printed on the product. Gujarat Cooperative Milk Marketing Federation, which makes Amul, the country’s largest dairy brand, has told distributors to sell its products at the revised prices.
Dabur, the maker of Real fruit juices and herbal and ayurvedic products, said it has not informed its trade channels about the revised prices.
Some companies may not cut prices and instead increase pack sizes.
“When the tax slabs went up in July, we did not increase prices. Now that they have been revised downwards, we may not drop prices. We will wait and see how the market dynamics play out before taking a decision,” said the head of a large cosmetics company. Consumers should keep a tab on restaurant bills, too.
Some companies manufacturing these products have asked traders to pass on the tax cuts to consumers immediately, without waiting to put revised maximum retail price stickers on them or printing new packs, both of which would take time.
A watch company and a printer maker plan to inform customers about the price reduction through newspaper advertisements. Still, consumers should be aware that not all companies may implement the price cuts right away.
The changes will affect a large number of products that are already in stores or on their way there. Pasting stickers with revised prices can be done only after the government gives the go ahead. Apart from taking time, some companies said pasting stickers costs the same as printing packs with the revised prices.
The maximum retail price of a product includes taxes and unless a company increases the base price or raises the margin for distributors and dealers, these products should become cheaper. The government is yet to issue fresh guidelines on pasting stickers with the revised prices.
The GST Council reduced the tax rate on about 200 products, of which 178 were moved to 18 per cent from the 28 per cent slab, at its 23rd meeting on November 10. The new rates are effective from midnight Tuesday, with both the states and the Centre issuing notifications.
“However, given the paucity of time, most companies have not been able to reduce the MRP of products but have communicated to dealers and retailers that prices should be brought down.” Consumers need to be aware about what prices are likely to come down and by how much, irrespective of the MRP printed on the product. Gujarat Cooperative Milk Marketing Federation, which makes Amul, the country’s largest dairy brand, has told distributors to sell its products at the revised prices.
Dabur, the maker of Real fruit juices and herbal and ayurvedic products, said it has not informed its trade channels about the revised prices.
Some companies may not cut prices and instead increase pack sizes.
“When the tax slabs went up in July, we did not increase prices. Now that they have been revised downwards, we may not drop prices. We will wait and see how the market dynamics play out before taking a decision,” said the head of a large cosmetics company. Consumers should keep a tab on restaurant bills, too.
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