The Finance Ministry has asked its GST field officers to track the prices of everyday items after the new GST 2.0 rates take effect on September 22. This step comes amid concerns that industries may not fully pass on the benefits of tax cuts to consumers.
In a letter to senior GST officials, the Revenue Department directed officers to collect monthly commodity-wise price data for the next six months. Reports must be sent to the Central Board of Indirect Taxes and Customs (CBIC) by the 20th of every month, with the first due by September 30.
Items Under Price Watch
The data will cover food items such as milk products, butter, cheese, ghee, dry fruits, chocolates, biscuits, cornflakes, ketchup, jams, cakes, ice cream, and drinking water bottles. GST on these items has been cut from 12–18% to 5%, while UHT milk will now attract no GST.
Other essential items under watch include:
- FMCG products: toilet soaps, hair oil, shampoo, toothpaste, toothbrushes, talcum powder, shaving creams, aftershave lotions.
- Educational supplies: notebooks, pencils, crayons, erasers, graph books, and math boxes.
- White goods: air conditioners, washing machines, dishwashers, and TVs, with GST cut from 28% to 18%.
- Healthcare items: drugs, medicines, bandages, thermometers, glucometers, baby care products like feeding bottles and napkins.
- Construction material: cement, which also saw a tax reduction.
Anti-Profiteering Concerns
India had introduced anti-profiteering rules in 2017 to ensure tax cuts benefit consumers. A National Anti-Profiteering Authority (NAA) was set up, but since December 2022, cases have been handled by the Competition Commission of India (CCI).
Revenue Secretary Arvind Shrivastava recently said that the industry had largely passed on tax benefits in the past. Of the 704 profiteering cases since 2017, most came in the first few years, with about ₹4,362 crore under review.
He added that the government expects businesses to pass on GST 2.0 benefits as well, saying it will also be in their interest to do so.
Why the Move Matters
The Finance Ministry’s monitoring exercise is meant to build transparency and consumer trust. By tracking maximum retail prices before and after GST changes, the government hopes to ensure customers actually benefit from the new 5% and 18% GST slab structure approved by the GST Council.
With GST 2.0 marking the biggest tax reform since its rollout in 2017, officials are keen to avoid profiteering and ensure that reduced rates make essential goods and services more affordable.
Nithin Rosh