GST Rejig
Monitoring if cos passing GST rate cuts, to step in when needed, says govt source
This story was originally published at 14:52 IST on 23 September 2025
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NEW DELHI – Amidst host of complaints on social media about many companies, including e-commerce platforms selling fast moving consumer goods, not passing on the benefit of reduced goods and services tax to end-customers, a senior finance ministry official Tuesday said that the government is monitoring the situation and will step in to take action as needed.
"Reforms take time to settle...we are monitoring the price changes," the official said, adding that field formations are monitoring the price changes and will submit first report by Sept. 30. "We do not want knee-jerk reaction to such complaints," the official said.
On Sept. 3, the GST Council overhauled the indirect tax regime as part of next-generation reforms by collapsing the four-slab GST structure of 5%, 12%, 18%, and 28% to a two-slab structure of 5% and 18%. The council also introduced a new GST rate of 40% on sin and luxury goods. All the new rates, except for those on tobacco products, took effect from Monday.
In the absence of anti-profiteering mechanism to file complaints relating to profiteering, the government has been monitoring the price changes and various companies have themselves come forward and said they are passing on tax cut benefits by reducing prices.
The finance ministry, on Sept. 9, asked its field officers to compile monthly data reports on changes in prices of common-use articles for six months, with the first data report to be submitted to the ministry by September end. The letter, seen by Informist, asks the field offices to treat the exercise "on priority". The data has to include the name of the commodity, brand, and maximum retail price of 54 items before and after Monday. The list of 54 items include butter, shampoo, toothpaste, tomato ketchup, jams, ice cream, air conditioner, televisions, all diagnostic kit, glucometer, bandages, thermometer, erasers, crayons, cement.
According to the official, after the first report is submitted, if the ministry finds out many companies are not passing on the GST cut benefits, then senior ministry officials like Revenue Secretary Arvind Srivastava and Central Board of Indirect Taxes and Customs Chairman Sanjay Agarwal can step in to evaluate what is to be done in that situation.
The risks of profiteering are not new as there have been occasions in the past when cuts in tax rates announced by the GST Council have not been passed on to consumers. Instead, companies have increased their profit margins. In November 2017, after the council reduced GST rates on restaurants to 5% from 18% and 12%, anti-profiteering investigations were initiated against some restaurants for allegedly not passing on the benefit of reduced taxes to customers. End
Reported by Priyasmita Dutta
Edited by Ashish Shirke
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