The Goods and Services Tax (GST) rates have been nearly implemented, and three out of four consumers believe that companies will reduce prices to reflect these changes, according to a survey conducted by LocalCircles.
In the survey, it was discovered that on the grounds of the earlier experiences, nearly 42% of the respondents were just partially confident, and 33% were under-confident towards the companies to reduce maximum retail prices (MRP) or service charges in line with the revised GST rates. Merely 25% cited that they were confident that the firms would provide advantages to the customers.
A revised tax structure has been approved via the GST council, where most goods and services shall be taxed at 5% and 18%. But on the “sin” goods, there will be a GST rate of 40% where goods like carbonated drinks, etc, come. From September 22, the revised rates shall be applicable.
People Seek Govt Intervention
To ensure that the benefits of lower tax rates are given to consumers, 87% of the respondents seek the centre to revive an anti-profiteering or unfair trade practice enforcement mechanism.
In the survey, it was cited that the consumers’ demand is not justified, as also, in the past, the benefits of the tax cuts have not been shown in the MRP of products. Instead, on the pretext of higher input costs, brands are known to retain the MRP or even raise it.
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Blurb- In 2017, the National Anti-profiteering Authority (NAA) was established under the Central GST Act to validate whether the companies are providing benefits of GST rationalisation to consumers or not. In December 2022, the same was eliminated with its operations moved first to the Competition Commission of India (CCI) and subsequently to the GST Appellate Tribunal.
The Centre is committed to market-driven pricing; however, concerns about unjust profiteering shall not be carried if companies do not lower their maximum retail prices (MRPs) in accordance with reduced tax rates. Planning for anti-profiteering implementation measures for up to two years will be effected to ensure that businesses do not take advantage of these lower rates for their own profit.
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GST reform has been welcomed by various firms, some of them had also declared rate reduction advantages for the consumers. Responses have been recorded by the survey from more than 39,000 people from across 314 districts, with 61% male and 39% female participants. 42 per cent of respondents were from tier 1, 28 per cent from tier 2, and 26 per cent of respondents were from tier 3 & 4 districts.
