Will GST rate cuts make your essentials cheaper? Here’s how govt plans to track

The GST Council last week approved sweeping changes to the indirect taxation on goods and services, collapsing the existing four-rate structure into two, along with a separate 40% rate for luxury and ‘sin’ products.

With the restructuring of GST, several products, earlier placed in the 12% and 28% slabs, will be moved to the lower 5% and 18% bands.

This is expected to make a host of goods and services cheaper, starting from September 22, the scheduled implementation date.

However, consumers are wary of whether the companies will fully pass on the benefits of the rate cuts, despite the government’s repeated calls to do so.

On Wednesday, Commerce and Industry Minister Piyush Goyal urged auto dealer associations to pass on the benefits of GST rate cuts to consumers.

"I am sure the federation of auto dealers will give a good deal to all their buyers of two wheelers, three wheelers, four wheelers, who are hopefully going to come to you in larger numbers in the years to come, with automobiles becoming more affordable, and obviously, I'm assuming you will pass on that benefit to the consumers...22nd September, first day of Navratri, you'll start passing on the benefits of the GST reductions,” Goyal said at Auto Retail Conclave organised by the Federation of Automobile Dealers Associations (FADA).

While automakers have started announcing cuts in vehicle prices, the price impact on commonly used items is yet to be seen.

Steps taken by finance ministry

The finance ministry has asked Central GST field officers to submit a monthly report of price change in 54 commonly use items, like butter, thermometer and toys.

In a letter to Principal Chief Commissioners of CGST zones, the ministry said the first report on the comparative details of the Maximum Retail Price (MRP) of these commodities brand-wise will have to be submitted to the Central Board of Indirect Taxes and Customs (CBIC) by September 30.

The monthly report on pre- and post-September 22 MRP will have to be submitted to the CBIC by the 20th of every month for the next six months.

The list of 54 items includes cement, shampoo, toothpaste, tomato ketchup, jams, ice cream, AC, TV, all diagnostic kits, glucometer, bandages, erasers, and crayons, among others.