Small stores on slow track in passing on GST rate cut

It has been nearly a month since the government's latest Goods and Services Tax (GST) rate cuts came into effect, but chances are some packaged goods may still be sold at old prices in small retail stores.

- Gireesh Chandra Prasad [e-mail]

While large companies have advertised lower prices and announced full pass-through of the tax cuts, officials monitoring the implementation say small, unorganized retailers, many of them outside the GST system, remain a weak link in ensuring consumers actually see the benefit.

Officials tracking the price reductions following the GST reforms effective 22 September have observed instances of retailers selling their old inventory at the printed prices rather than at the reduced rates, said two persons familiar with the development.

Retailers are required to sell at revised prices that reflect the tax relief, even if their existing stock carries pre-cut maximum retail prices (MRPs).

They have the option to affix new price stickers.

However, the government cannot take legal action against unorganized retailers who fail to comply, given that they are not registered under GST.