Grocery expenses won’t rise after GST roll out

Grocery GST effect
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After the implementation of GST from July 1, prices for most groceries, household and personal care products will remain unchanged for at least six to eight weeks. This is because the companies aren’t too sure about how the new levy will impact their cost of operations.

Cookies, toothpaste, soaps and hair oils will come under the slab of 18% which is 4% less from the previous tax figures. While detergents, shampoos and skin care products will attract a higher 28% levy.

Vivek Gambhir, Consumer managing director of Godrej said, “While our intent is to pass on the benefits of lower GST in the relevant categories where rates are coming down to consumers as soon as it is feasible, there are still some open issues where we need clarity such as how area-based exemptions will be handled, that will impact pricing decisions”.

According to the retailers and distributors, the products of Hindustan Unilever, Marico, Dabur, Colgate, Procter & Gamble and Britannia will carry the same price tags until August.

Due to GST, several companies and retailers have been either halting supplies or plan to bill limited stocks in the last few days of the month.

Mayank Shah, group product manager at Parle Products said, “We can’t change price points such as ₹5 and ₹10. The only option would be to reduce or increase weight, but it won’t be based on just GST on final products”. He also added, “We need one-two months to see if the new tax has any impact on the cost of products and what will be the credit on the input to offset them”.

Companies have agreed to compensate for any loss of margins due to the difference, there will be unnecessary paperwork. While Bisleri said altering prices by Rs 1-2 doesn’t really work for the consumer.