As India readies for one of the most sweeping Goods and Services Tax (GST) rate cuts to take effect from September 22, consumer skepticism looms large. A new survey by LocalCircles reveals that only 18% of consumers believe they actually received the benefit of GST rate reductions during the 2018–19 rationalisation exercise, while half of the respondents said manufacturers, distributors, or retailers absorbed the benefit without passing it on to buyers.
The findings come even as the government has stepped up monitoring to ensure compliance this time. The Central Board of Indirect Taxes and Customs (CBIC) has asked businesses to submit tentative price lists of consumer durables and other products, which will be displayed on the official GST website. Retail outlets and dealerships, too, have been directed to show both pre- and post-GST rates so that consumers can see the exact price relief.
Officials estimate that 90% of the GST rate cut benefits will flow to end customers. According to the government, consumer durable prices could fall by 10% while automobile costs, including two-wheelers, could come down by 12–15%. But industry insiders admit that only visible price drops will convince buyers, many of whom are deferring big-ticket purchases like TVs, refrigerators and washing machines until the new rates apply.
Pharma and FMCG under lens
The National Pharmaceutical Pricing Authority (NPPA) has issued a directive to drug makers and medical device companies mandating price revisions effective September 22. Essential medicines earlier taxed at 5% GST will now be exempt, while those in the 12% bracket have been moved down to 5%.
“The benefit of reduction in GST rates shall be passed on to consumers/patients effective from September 22, 2025,” the NPPA said, warning companies against non-compliance.
Meanwhile, the Department of Legal Metrology has allowed manufacturers to exhaust old packaging and MRP labels until March 31, 2026, without mandatory relabeling. While this offers cost relief to businesses, it also leaves consumers dependent on retailers to transparently pass on GST-related reductions.
Consumers still wary
The LocalCircles survey, which received over 36,000 responses across 319 districts, paints a telling picture of past consumer experience. In 2018–19, only 9% said MRPs were actually lowered, and another 9% said they received relief through discounts. However, 26% pointed fingers at manufacturers for not reducing MRPs, 9% at distributors for not passing on benefits, and 15% at retailers for withholding discounts or updated price tags.
The lack of a structured enforcement framework appears to be the missing link. The anti-profiteering authority, which once monitored such cases, no longer exists, and there is no explicit provision under the Consumer Protection Act, 2019, to treat non-passing of GST benefits as an unfair trade practice.
The demand for brand accountability
The same survey found that 78% of consumers want brands to create mechanisms to ensure retailers pass on GST cuts to buyers. Only 13% felt this responsibility should lie with the government, while 5% opposed any such mechanism.
“Given the past experience, it is evident that consumers don’t automatically benefit from GST rate cuts. Unless brands put systems in place and enforce compliance down their distribution chain, the intended relief will not reach the end buyer,” LocalCircles said in its findings.
The road ahead
The September 22 transition will test the ability of manufacturers, retailers, and policymakers to ensure that GST rationalisation truly benefits the public. With prices of consumer durables, automobiles, and medicines expected to drop, the onus now lies on brands and retailers to ensure transparency and pass-through.
For consumers still waiting to see real price cuts in their bills, the next few weeks will reveal whether this GST round will be any different from 2018–19.
