FMCG companies cut prices to pass on new tax benefits to customers

FMCG firms are revising prices of their products after the implementation of GST and are extending the tax benefits to the consumers under the new tax regime.

The companies such as Patanjali, ITC, HUL and Marico are either slashing the prices of goods or increasing the grammage of the product on dispatches made from July 1 onwards.

Vivek Karve, CFO, Marico, told PTI, "The company is committed to pass on the benefits of reduction in effective tax rate to its consumers wherever applicable and has firmed up the price reductions."

He further added, "The new prices will hit the market eventually."

An ITC spokesperson said, "Effective steps are being taken to pass on the benefits to the consumer, wherever such benefits accrue due to the recently announced GST rates."

HUL had reduced prices of some of its detergents and soaps, extending the tax benefits to consumers under the GST regime.

Companies are extending the benefits either in the form of price reduction or increasing the weight of the existing packet in the same price brackets.

A Patanjali spokesperson said, "We are passing on the entire tax benefits to the consumers. This would be in both ways - by slashing the price and increasing the grammage."