FMCG companies are revising prices of their products after the implementation of GST and are extending the tax benefits to the consumers under the new tax regime. The companies such as Patanjali, ITC, HUL and Marico are either slashing the prices of goods or increasing the grammage of the product on dispatches made from July 1 onwards.
"The company is committed to pass on the benefits of reduction in effective tax rate to its consumers wherever applicable and has firmed up the price reductions," Marico CFO Vivek Karve told PTI. He further added: "The new prices will hit the market eventually".
"Effective steps are being taken to pass on the benefits to the consumer, wherever such benefits accrue due to the recently announced GST rates," an ITC spokesperson said.
On Monday, HUL had reduced prices of some of its detergents and soaps, extending the tax benefits to consumers under the GST regime. The company had slashed the price of its detergent soap Rin bar of 250 gm to Rs. 15 from Rs. 18 and increased weight (grammage) of its Surf Excel bar costing Rs. 10 to 105 gm from 95 gm at the same price.
Benefits for customers
Companies are extending the benefits either in the form of price reduction or increasing the weight of the existing packet in the same price brackets.
"We are passing on the entire tax benefits to the consumers. This would be in both ways - by slashing the price and increasing the grammage," said a spokesperson of Haridwar based Patanjali.
GST tax slabs
The GST council has put daily usage goods as bathing soap, hair oil, detergent powder, soap, tissue papers and napkins under 18 per cent tax slab.
Honda Cars India has brought down prices of its models by up to Rs 1.31 lakh with immediate effect to help customers reap GST benefit.
Maruti Suzuki India (MSI) has slashed prices of its models by up to 3 per cent with immediate effect to pass on GST benefit to its customers. The ex-showroom prices of Maruti Suzuki models have come down by up to 3 per cent. The rate of reduction varies across locations depending on VAT rates applicable prior to GST
Price cut in auto sector
Various automakers such as Ford, Maruti Suzuki, Toyota, Jaguar Land Rover, and BMW have effected price cuts to transmit the GST relief down the line.