Consumers should see direct price drop of products, services after GST cut: HC

Consumers should see a direct drop in prices when Goods and Services Tax rates are reduced, and not be shortchanged through subtle product adjustments, the Delhi high court has ruled.

- Shruti Kakkar

A bench of justices Prathiba M Singh and Shail Jain, in a ruling delivered on September 23, made it clear that keeping prices unchanged while merely increasing the quantity or running a promotional scheme does not pass on the real benefit of the tax cut.

The court, in its verdict released on Friday, emphasised that the very purpose of reducing GST rates is to make goods and services more affordable for buyers. Such practices frustrate the intent of the cuts, amount to deception and curtail consumer choice. The ruling assumes significance in the wake of the GST council's major overhaul of the tax structure effective September 22, 2025, moving from a multi-slab system to primarily two rates, 5% and 18%, and a 40% rate for luxury/sin goods. To be sure, the case relates to an earlier reduction in GST rates.