Are E-Commerce Giants Pocketing GST Cuts? Centre Tracks Price Reductions
Centre monitors if e-commerce platforms are passing GST cuts to consumers.
The Central Government has launched a monitoring initiative to verify whether e-commerce platforms are passing on the benefits of the recent Goods and Services Tax (GST) rate cuts to consumers, particularly for fast-moving consumer goods (FMCG), according to official sources. This follows complaints that some platforms have not adequately reduced prices for daily essentials despite the revised tax structure.
Effective from September 22, the GST framework has been simplified into a two-tier structure of 5% and 18%, consolidating the previous rates of 5%, 12%, 18%, and 28%. This change has lowered taxes on 99% of daily-use items, aiming to reduce costs for consumers. However, concerns over non-commensurate price reductions on e-commerce platforms have prompted the government to act.
"We are monitoring the price changes. Field formations are monitoring, and we will receive the first report by September 30," a government source stated, emphasizing a measured approach to avoid knee-jerk reactions to complaints. While the anti-profiteering mechanism has not been activated, the government is closely tracking pricing trends, with several companies voluntarily confirming they are passing on tax cut benefits by lowering prices.
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On September 9, the Finance Ministry directed Central GST field officers to submit monthly reports on price changes for 54 commonly used items, including butter, shampoo, toothpaste, tomato ketchup, jams, ice cream, air conditioners, televisions, diagnostic kits, glucometers, bandages, thermometers, erasers, crayons, and cement. The first report, detailing brand-wise Maximum Retail Price (MRP) comparisons, is due to the Central Board of Indirect Taxes and Customs (CBIC) by September 30.
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