Firms can raise grammage, and not cut prices, despite HC ruling

GST RATE RATIONALISATION

- MONIKA YADAV

Fast-moving consumer goods (FMCG) companies have the option to increase grammage in products instead of reducing price to pass on the benefits under the latest round of rationalisation in goods and services tax (GST) rates, despite a recent ruling by the Delhi High Court on an old dispute, according to government officials.

The Delhi High Court last month adjudged that increasing quantity without reducing the maximum retail price (MRP) after GST cuts amounts to "deception" as the purpose of tax cut is to make products and services more cost-effective for consumers.

However, one of the officials said the judgment is based on the earlier anti-profiteering framework, which is not applicable under GST 2.0, rolled out on September 22.