FMCG companies, including ITC, Dabur, HUL and Marico, today said they have cut prices of various products to pass on the benefits of GST rate reduction to end-consumers.
Companies said they will extend the price reduction to other categories, which have also seen tax rate cuts. The development comes a day after the government asked the firms to pass on lower GST rates to consumers.
Goods and Services Tax (GST) rate was reduced on 178 items, including detergents, shampoos and beauty products, from 28 per cent to 18 per cent from November 15.
HUL spokesperson said "We have reduced price for Bru Gold coffee from Rs 145 to Rs 111 on a 50 gm pack. Any further price changes will be communicated in due course. HUL remains committed to passing on the benefits of GST reduction to the consumers
Marico CFO Vivek Karve said “company has effected MRP reductions on products across categories such as deodorants, hair gels, hair creams, body care etc. While the new production shifts to new reduced MRP immediately, we are passing on the benefits on existing stocks either through stickering the products with reduced MRP or by providing additional discounts to our trade channel partners. Company has also sent out communication to its partners to pass on the benefit of reduced taxes to the consumers”.
Patanjali spokesperson said "We welcome this step and the benefits must be transferred to the customers. We are evaluating over the quantum of decrease."
Items on which tax rate has been cut from 28 per cent to 18 per cent include chewing gum, chocolates, coffee, custard powder, dental hygiene products, creams, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, batteries, goggles, wrist watches and mattress.