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80% Consumers Missed GST Relief in FY18–19; Will 2025 Be Any Different, Asks LocalCircles
Moneylife Digital Team 19 September 2025
Economy & Nation
As the country prepares for a fresh round of goods and services tax (GST) rate cuts on consumer durables, automobiles, and medicines from 22nd September, a new survey by LocalCircles highlights a persistent concern: most consumers do not believe earlier GST reductions were effectively passed on to them.
 
According to the survey, only 18% of respondents said they benefited from the GST rate rationalisation of FY18–19. In contrast, half the respondents felt that manufacturers, distributors, or retailers failed to reduce maximum retail prices (MRPs) or offer equivalent discounts, leaving consumers unable to enjoy the intended relief.
 
The findings come at a time when the Union government has directed businesses to publish tentative price lists of consumer durables and other products, both online and in retail outlets, to show the extent of relief consumers can expect. 
 
The central board of indirect taxes and customs (CBIC) has had a meeting with representatives from business chambers, industry bodies, and ministries of heavy industry, consumer durables, agriculture, and pharma to ensure smooth implementation of the rate cut announced by the GST Council. 
 
The Union government expects 90% of the rate rationalisation to be passed on to customers, with most industries agreeing to pass on the benefits of the rate cuts. Officials expect around 90% of the GST rate cuts to reach buyers, with reductions of up to 10% for consumer durables and 12%–15% for automobiles.
 
The national pharmaceutical pricing authority (NPPA) has issued similar directions to drug makers and medical device companies, requiring revised prices from 22 September 2025, as the GST Council has approved rate cuts on several medicines. The 56th GST Council has recommended slashing the GST rates on major drugs from 5% to nil. The medications earlier charged under the 12% slab are now being shifted to the 5% slab.
 
However, past experience raises doubts. In the LocalCircles survey, 26% of consumers blamed manufacturers for not lowering MRPs or passing benefits down the supply chain, while 15% felt retailers withheld the relief. About 9% each say either MRPs were reduced or discounts were directly passed by retailers, while nearly one-third were unsure.
 
The issue is compounded by rules from the department of legal metrology, which allow old packaging with higher MRP labels to be sold until 31 March 2026. While this spares manufacturers from re-labelling costs, it also places the onus on retailers to pass on the reduced rates, something consumers are sceptical about.
 
Looking ahead, 78% of respondents say brands must be held responsible for ensuring that GST benefits reach the end consumer. They want brands to put in place enforcement mechanisms to make sure retailers pass on the rate cuts. With the anti-profiteering authority no longer in existence, and no specific mandate under the Consumer Protection Act, 2019, to treat non-compliance as an unfair trade practice, consumers now see brands as the only reliable safeguard.
 
The LocalCircles survey gathered over 36,000 responses from citizens across 319 districts. 
 
In summary, while the government and industry bodies expect consumers to benefit significantly from the upcoming GST cuts, past experience suggests caution. Unless brands take proactive steps to monitor and enforce pass-through, much of the intended relief may not reach household budgets.
Comments
parimalshah1
8 months ago
Why are fuel, real estate, and alcoholic beverages; still not under GST?
Reply
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