FMCG Firms Say They Cannot Directly Pass GST Cuts
Consumer goods companies say that even though GST rates are being cut, they cannot directly lower prices for consumers. They argue that factors like input costs, packaging, distribution, and existing stock with old pricing make immediate price reductions difficult.
Government Expectation
The government, including the Finance Ministry and CBIC, has made clear that firms must ensure that GST rate cuts lead to benefits for consumers. There is pressure on companies to reprice products when possible.
Operational & Logistical Challenges
FMCG firms point out that many packages are pre-printed with old prices and labels. Changing these involves costs and time. They also mention that supply chain and inventory cycles mean old stocks with higher GST rates are still in the pipeline.
Response From Regulators
Regulators have urged clearer guidance on labeling, packaging, and stock rules to help companies pass on the savings fairly. There are discussions on allowing sale of old-pack stock at reduced prices to avoid waste and ensure consumer benefits.
