It has already been a month since the government had slashed the GST rate on 177 items. However, the entire benefit is yet to reach the consumers. Legal metrology investigators have booked over 15,000 cases of MRP violations across India, with restaurants figuring among the top violators. The fast-moving consumer goods (FMCG) sector; especially bottled mineral water and aerated drinks, is found to be most vulnerable to illegal trade practices.
GST Rate Cut Not Benefiting Citizens
On 15th November, the GST Council had reduced tax rates on about 177 items from 28% to 18%. The Centre had also set up an anti-profiteering jurisdiction to monitor compliance. The traders were asked to reduce MRP as per the lowered GST in consultation with producers & affix stickers of the new MRP on packages.
However, several products are still being sold at old rates despite the Government order. The director of the consumer affairs department, BN Dixit said that the cases of MRP violations & anti-profiteering are being registered across the country and they are compiling a report based on inputs from individual states which they will submit to the Parliament on 15th December.
As per BN Dixit, few sectors were obedient to the antiprofiteering clause of the GST law & were quickly passing the benefit of lower prices to consumers. However, many sectors are still selling goods at older prices.
The assistant controller of Karnataka Legal Metrology, M Mamatha said that the Department of Legal Metrology carried out 1,557 inspections for four days after 24th November across Karnataka & 183 cases of profiteering were booked. Where few sectors such as ceramic ware are following the MRP rules; many other commodities, especially from the FMCG & stationery sectors are still being sold at higher prices.
The Chairman of states taxation committee of FKCCI and member of Karnataka state GST advisory committee BT Manohar said that the concern is that the traders have already paid 28% GST & they should collect 18% tax from consumers. There’s no clarity on how they will get back 10% of the excess tax they have paid.