Consumers Struggle to Get GST Rate Cut Benefits on Food and Medicines: Survey

Consumers Struggle to Get GST Rate Cut Benefits on Food and Medicines: Survey

A survey has indicated that consumers are struggling to receive the full benefit of the Goods and Services Tax (GST) rate rationalization on essential daily products, specifically food and medicines.

Key Findings of the Survey

• Missing Price Reductions: Despite the government cutting GST rates on numerous products categorized as daily essentials (as part of the GST 2.0 reforms), a significant number of consumers reported that the final retail prices for food items and medicines have not decreased proportionally.
• Contrasting Sectors: This lack of price reduction in essentials contrasts sharply with sectors like automobiles and white goods, where the GST cuts were quickly and effectively passed on to the consumer, leading to a surge in sales.
• The Transmission Gap: The survey points to a failure in the supply chain and retail network to transmit the tax benefits to the end consumer for low-value, high-volume goods. The delay or denial is often attributed to issues like existing inventory with old tax rates or anti-profiteering practices by manufacturers and retailers.
• Impact on Public: The intended goal of the GST reforms—to boost affordability and provide relief to the common public on household expenditure—is being hampered by this gap in price transmission for basic necessities.