Customers should carefully check the maximum retail price (MRP) labels on products when the new goods and services tax regime comes into effect from September 22.
Customers may see two MRPs for the same products due to old stock in pipeline. The new slabs are expected to bring down prices of several consumer goods but it make take some weeks before the transition to GST 2.0 is completed, say experts.
“From September 22, customers will benefit from the revised, lower MRP following the GST reduction. However, since existing stock is already in the distribution pipeline, it may take two–three months for the transition to be fully reflected in the market,” said the director, Bikanervala Foods Pvt Ltd, a popular Indian sweets, snacks, and restaurant chain.
During this period, two different MRPs may be visible on products due to old stock in pipeline. “We want to assure customers that the benefit of reduced GST will be passed on in all cases. If any retailer does not extend this benefit, customers are well within their rights to request the lower MRP,” Aggarwal, who is also CEO of Bikano, sadi.
The GST on namkeens, bhujia, mixture, and similar items has been lowered from 12 percent to 5 percent.
Early this month, the GST Council simplified the tax structure by moving to two primary slabs of 5 percent and 12 percent, doing away with 18 percent and 28 percent rates. A special 40 percent rate will continue to apply to “sin goods”.
“Legally, from September 22, invoices must reflect the revised GST rate. Retailers can’t charge you the old rate even if their distributor arrangements are pending,” an tax expert said. The government has also said it won’t invoke anti-profiteering rules aggressively but expects companies to pass on benefits directly to customers. So consumers will see the reduction in final prices, he said.
Another tax expert said, “Yes, any sales made till September 21 will attract the current rates. From September 22, sales will attract the lower rates.”
He, pointed to a grey area in the transition process. “Refunds under the inverted duty structure won’t be available for such rate transitions, according to the latest government circulars. That makes this tricky. Some companies may compensate dealers, others may absorb the cost, while a few could try to adjust it through margins,” he said.
For consumers, the message is clear: from September 22, double-check MRPs and invoices before making purchases. If the GST rate on a product has been reduced, you are entitled to the lower price. If a retailer refuses, they can for the revised price.
