Will the Government Ensure Companies Pass GST Cuts to Consumers?
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Synopsis
Amid the recent GST rate cuts, Consumer Affairs Secretary Nidhi Khare warns companies to comply or face strict penalties. The government aims for significant economic growth through reduced taxes on essential goods, ensuring consumers benefit from these changes.
Key Takeaways
- Companies must pass on GST benefits to consumers.
- Government monitoring to ensure compliance.
- GST reductions apply to over 370 items.
- Essential goods and medicines to become more affordable.
- High tax rates remain for certain products.
New Delhi, Sep 22 (NationPress) Consumer Affairs Secretary Nidhi Khare issued a stern warning to companies on Monday, indicating that they would face stringent penalties if they do not transmit the benefits of the decreased Goods and Services Tax (GST) rates to consumers. In a conversation with NDTV Profit, Khare emphasized that any business failing to update their prices to reflect the new GST rates would be considered to be engaging in “unfair practice.”
She reassured the public that the government is fully prepared to oversee compliance.
“If we determine that the reduced GST has not been passed on, it will be classified as an unfair practice. We will initiate collective action against those who neglect to pass on GST benefits,” she stated, promising that consumer grievances would also be dealt with swiftly.
This warning coincides with the introduction of the new GST framework on Monday, which has lowered taxes on approximately 370 items, encompassing essential goods and lifesaving medications.
Finance Minister Nirmala Sitharaman previously mentioned that this new system is expected to inject nearly Rs 2 lakh crore into the economy by enhancing household purchasing power.
Common food items like UHT milk, paneer, chapatis, parathas, butter, biscuits, namkeen, ketchup, and juices have seen a decrease in prices under the new structure.
Toiletries such as soaps, shampoos, and hair oils, as well as stationery items like notebooks and pencils, are now free from GST.
Critical medications for cancer and rare diseases have been exempted, while the GST rate on diagnostic kits and glucometers has been reduced to just 5 percent.
Cement for construction has witnessed a significant reduction, dropping from 28 percent to 18 percent. Even services like salons, gyms, and yoga classes now fall under lower GST categories.
On the downside, products such as tobacco, pan masala, and carbonated beverages remain in the highest tax bracket at 40 percent, while large SUVs and MPVs have been included in the same category to compensate for revenue losses.
With the prices of essentials, medications, and household products declining, officials anticipate that this initiative will enhance consumption and stimulate the economy in the upcoming months.
Point of View
It is crucial to highlight the government's proactive stance in ensuring consumer rights through strict compliance measures. This initiative not only protects consumers but also aims to stimulate economic growth by enhancing purchasing power across the nation.
NationPress
22/09/2025
Frequently Asked Questions
What actions will the government take against non-compliant companies?
The government will initiate strict penalties and class action against companies that do not pass on GST benefits to consumers.
Which items have seen a reduction in GST?
Around 370 items, including essential goods and lifesaving medicines, have witnessed a reduction in GST rates.
How does this GST reduction aim to impact the economy?
The GST cuts are expected to inject nearly Rs 2 lakh crore into the economy by boosting household spending power.
What is the new GST rate for essential drugs?
Essential drugs for cancer and rare diseases have been exempted from GST.
Are there any products that remain at a high GST rate?
Yes, tobacco, pan masala, and aerated beverages remain in the highest tax category at 40 percent.
