Report Alleges Cement Firms Tried to Pocket GST Benefit Meant for Consumers

Report Alleges Cement Firms Tried to Pocket GST Benefit Meant for Consumers

A report suggests that several cement manufacturers may have been engaging in a strategic effort to retain the financial benefit resulting from the recent GST rate reduction, rather than passing the full savings on to the final consumers.

Key Allegation

• Anti-Profiteering Conduct: The central allegation is that cement companies were strategically adjusting their pricing structure to absorb a significant portion of the tax cut. This behavior, if proven, would constitute anti-profiteering under GST law, which mandates that the entire benefit of any tax rate reduction must be passed on to the consumer via lower prices.
• The Tax Cut: The GST rate on cement was substantially reduced from 28% to 18% as part of the GST 2.0 rationalization drive. This 10 percentage point cut was intended to lower construction costs and boost the housing and infrastructure sectors.
• Modus Operandi: Companies are alleged to have manipulated the base price of cement (the price before tax) to compensate for the lower GST rate, ensuring that the final retail price paid by the builder or end-user did not decrease proportionally to the tax reduction.

Enforcement Context

This concern has triggered increased scrutiny from anti-profiteering authorities and tax enforcement agencies, who are monitoring pricing by major manufacturers to ensure compliance with the law and protect consumer interests.