The GST Council in its noble move, have cut down the number of items in the 18% slab. One of the most benefited sector by this move is the Fast Moving Consumer Goods, FMCG. Price cutting in the market can only be seen when these are reflected in the goods from this sector. In an effort to reciprocate to the GST tax revision, The government has approached the FMCG companies to reduce the prices of the goods.
In a letter, CBEC Chairperson Vanaja Sarna pointed out the need to immediately revise the MRP on all the products for which the tax reductions have been announced by the GST Council. Taking this price cut to the ground zero market, companies like ITC, Dabur, HUL and Marico, have announced price drop in some of their products. The companies said that they will extend the price reduction to other categories, which have also seen tax rate cuts.
GST rate was reduced on 178 items, including detergents, shampoos and beauty products, from 28 percent to 18 percent from 15th of November. Many products also witnessed the drop from the earlier 18 % to 12 % tax slab. Food and edibles like cocoa, chocolate, non alcoholic beverages and wafers was shifted from the earlier 28% to 18%. This has been the most rate cut than other food items by 10 percent.
Diabetic food has shifted itself from 18% to 12 % tax slab. Other food items like refined sugar, condensed milk, pasta and curry pasta has also been moved to 12% tax bracket. Handicrafts furniture made of bamboo or crane, knitted hats , jute and cotton handbags are also included in this list. Food such as dried vegetables and sweet potato , died or froze fish and coconut shells has attracted nil taxes from earlier 5%.