The Goods and Services Tax (GST) has somehow affected every individual and business in India. Let’s take a look at the impact of GST on the prices of daily-use goods.
GST completes eight months of its launch on 1 March. The period has been quite amusing and somewhat troubling for the Indian companies and consumers. However, the prices haven’t troubled people as much as the confusion around GST rules, rates and the changes in prices. Let’s try to understand this with an example of an average consumer basket in one of the retail stores in India.
Rise in the Cost to Company
As per a survey, it has been found that the average cost of consumer products for companies has increased. It means the companies are now paying a higher amount under GST for the same product/basket as compared to before GST. However, the prices being paid by consumers are somewhat the same or even lower than before. This indicates one thing – companies are paying higher costs but cannot pass it on to consumers, probably to avoid being noticed by the anti-profiteering committee.
Read Also: MRP (Max Retail Price) Rules Under GST Act in India
Drop in the Prices for Consumers
Another major impact has been noticed in the form of reduced prices on average. This may, however, vary from city to city. For example, the MRP rates of some products have increased in Delhi but decreased in many other cities. However, the Selling Price (SP) have decreased than before. Manufacturers are not increasing prices to avoid profiteering claims and consumers are enjoying good discounts from retail chains like BigBasket.
To conclude, companies are now paying a higher amount in taxes, but consumers are paying reduced prices since companies are forced not to increase product prices.
Recommended: Is GST Giving Extra Benefits to the Indian Consumers?
