Major FMCG firms such as Hindustan Unilever, Dabur, Amul, GlaxoSmithKline, Procter & Gamble, Nestle and Perfetti Van Melle have confirmed that they are in the midst of slashing prices after the tax rate on several consumer goods such as shampoo, chocolates, nutrition drinks and condensed milk. This decision has been taken after the GST levied on these FMCG goods has been cut to 18% from the earlier 28%.
These firms are in fact, bound by the anti-profiteering clause under the GST law to pass on any benefit generated from lower tax incidence to consumers.
“We will drop prices at least by 5% on our shampoo range,” Dabur chief executive Sunil Duggal said. India’s largest dairy firm, Amul, would be reducing prices of condensed milk and chocolates by 5-10% while GlaxoSmithKline would reduce the price of Horlicks, its popular chocolate drink.
Though, the companies may encounter some hurdles while passing on the benefits to consumers, as some retailers have demanded that their margins be protected and the FMCG giants re-take the old stock before acquiescing to the price cuts.