Chairperson of the Central Board of Excise and Customs (CBEC) Vanaja Sarna has asked all the Fast-Moving Consumer Goods (FMCG) companies to immediately revise the maximum retail price (MRP) on their products according to the new reduced GST rates.
The Goods and Services Tax (GST) rate was slashed down on 178 items including detergents, shampoos and beauty products, from 28 per cent to 18 per cent from November 15.
In the biggest GST rejig, tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were cut to provide relief to consumers and businesses amid economic slowdown.
In her letter to FMCG firms, Sarna pointed out the need to immediately revise the MRP on all the products for which the tax reductions have been announced by the GST Council, according a statement by the finance ministry.
"She has also requested all to give wide publicity to the revised MRP of products. The Government expects that the industry should immediately respond to the earlier appeal made by the Finance Minister on this issue," it said.
"The benefit of reduction in the GST rate has to be passed on by the suppliers to the consumers by way of commensurate reduction in prices. The reduction in GST rates is also expected to encourage domestic demand and investment," the Finance ministry said.
The GST rate reduction has been done on mainly mass consumption products — to 18 per cent from the earlier 28 per cent. These items include furniture, detergents, shampoos, hair dyes, beauty products, perfumes, fans, lamps and mattresses.
ating out in restaurants — both AC and non AC — would also become cheaper as they have been moved to the tax rate of 5 per cent from the 18 per cent earlier. However, an Input Tax Credit which was given to restaurants will now be withdrawn. Though restaurants in starred hotels with room rent above Rs 7,500 will continue to attract GST of 18 per cent with ITC benefit. The new rates will be applicable from November 15.
The 28 per cent slab — the highest under GST implemented from July 1 — has now just 50 items, including parts of automobiles, washing machines, refrigerators, paan masalas and cigars, from the previously 227. GST has five tax slabs of 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent.
Paints and cement have been retained in the 28 per cent tax bracket. Even luxury goods like washing machines and air conditioners have been retained at 28 per cent.
The decision taken by the GST Council will have a revenue implication of Rs 20,000 crore annually, according to estimates.
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 "CBEC asks firms to revised MRP on goods to benefit consumers")
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