The government is leaving no stone unturned to ensure that the sweeping Goods and Services Tax (GST) rate cuts announced earlier this month translate into lower prices for consumers from September 22.
Sources told CNBC-TV18 that the Central Board of Indirect Taxes and Customs (CBIC) has been directed to keep a strict watch on market prices across categories to make sure that the benefits of tax reductions are fully passed on.
According to sources familiar with the matter, “CBIC has deploy its field formations on the ground across the country to monitor prices before and after the transition.”
Officers have been told to maintain a ready list of items where GST rates have been reduced and to track MRPs closely. Companies have been explicitly instructed not to adjust printed MRPs in a way that absorbs the tax cut, effectively denying the benefit to end consumers.
“Field formations will remain vigilant to prevent profiteering and ensure that the GST rate cuts feed directly into consumer prices,” a senior government official said.
The backdrop: GST rationalisation
On September 3, the GST Council announced one of the most significant rounds of tax rationalisation since the rollout of the indirect tax regime. The move was designed to ease inflationary pressure on households, spur consumption and simplify rate structures.
From September 22, essential daily-use goods currently taxed at 12% and 18% will be brought down to 5% or even nil in some cases. Aspirational products, which so far attracted the highest 28% slab, will move to a lower 18% slab. In addition, the cess levied on cars and aerated beverages will be removed altogether, bringing substantial relief to consumers.
Ensuring benefits flow through
While the cuts are expected to bring down prices and boost demand, the government is aware of past instances where companies held back benefits. That is why CBIC has been tasked with a proactive enforcement role this time. Field officers will not only monitor invoices and MRPs but also engage with businesses to ensure smooth compliance during the transition window.
The Consumer Affairs Ministry has also issued a parallel circular under the Legal Metrology Act, allowing companies to exhaust old packaging stock until December 31 while ensuring that the benefits of GST cuts are reflected in actual selling prices.
Boosting demand, curbing inflation
Officials say the dual approach—rate rationalisation and strict enforcement—is aimed at strengthening consumer sentiment at a time when household budgets are stretched. Lowering taxes on essentials and aspirational products is expected to stimulate demand across FMCG, white goods, automobiles and beverages, thereby giving a fillip to the broader economy.
“GST cuts are a direct consumption booster. The government’s clear message is that the benefits must reach the common man in full and thus will be doing price monitoring,” said a source familiar with the monitoring plan.
With both CBIC and the Consumer Affairs Ministry tightening oversight, the government hopes the September 22 GST cuts will have a visible impact on shop shelves and household budgets across India.
