1. GST impact: From hair oil to biscuits, these daily use products have become cheaper now

GST impact: From hair oil to biscuits, these daily use products have become cheaper now

Finance Minister Arun Jaitley had already claimed that after GST rollout from July 1 commodities will be cheaper.

By: | Updated: September 26, 2017 7:34 PM
narendra modi, arun jaitley, gst, fmcg products, fast moving consumer goods, fmcg products, fmcg items, Hindustan Unilever, ITC, big bazaar, hypercity, goods and services tax, Big basket, unibic, new tax system, commodities, tax evasion It seems GST rollout by PM Narendra Modi has started showing its positive impact. (PTI photo)

It seems GST rollout by PM Narendra Modi has started showing its positive impact on the people’s pockets in terms of cheaper household items and FMCG products. Finance Minister Arun Jaitley had already claimed that after GST rollout from July 1 commodities will be cheaper. According to a report by FE bureau, prices are falling in the FMCG segment. The drop has been witnessed a month-and-a-half after the roll out of the GST. Reportedly, a host of consumer majors, including Hindustan Unilever and ITC, have reduced prices of FMCG products. Here is the list of items which have become cheaper now due to GST:-

– Soaps
– Shampoo
– Detergents
– Biscuits
– Savoury snacks
– Hair oil
– Toothpaste
– skin cleanser

The sharp downward trend in prices has resulted in a 3-8% decline in prices of goods across modern retail outlets, including Big Bazaar and Hypercity, apart from online grocery firms such as Bigbasket and Grofers.

How rates got slashed due to GST?

The GST rate schedule indicates that nearly 81% of all items are in the 18% tax bracket, or below. After the implementation of the GST, hair oil, toothpaste and soaps have been put under the 18% tax slab, significantly lower than the previous 22-24% slab.

What industry leaders and biz bigwigs have to say?

“Post the roll-out of the GST, there has been a downward trend in prices of products as far as new stock is concerned. However, as we still have three-five months of old stock which belongs to the pre-GST regime, the larger impact would be seen once the old stock gets completely replaced by new items,” said Sadashiv Nayak, CEO of Big Bazaar, Future Group India.

For instance, biscuit manufacturer Unibic India has brought down prices by 10%-20% across products. Likewise, retailers claim that prices of other food products such as muesli too have come down. As for FMCG products, Hindustan Unilver in Q1FY18 results said it has reduced prices of products such as detergent bars, skin cleanser, toothpastes and hair oil. For example, a Surf Excel bar, which would earlier cost Rs 29, is now being sold at Rs 27. Similarly, the company is currently selling a pack of four Lifebuoy Activ Silver at Rs 94, instead of Rs 104.

Govind Shrikhande, managing director at Shoppers Stop, said: “At Hypercity, many of the food items have zero percent tax and we have passed the benefits to customers for our private labels. Hindustan Unilever too has reduced prices on certain products and other FMCG companies too have done the same.” Moreover, lowering of prices has helped boost sales. Albinder Dhindsa, CEO of Grofers, claims that the e-grocer, prior to the GST regime, was clocking a 15% spurt in monthly sales. After the implementation of the GST, the company posted a 23% increase in sales in July.

Echoing Dhindsa, Seshu Kumar Tirumala, national head – buying and merchandising, Bigbasket, said, “The reduction in prices of products has helped both consumers as well as sellers. Post the drop in prices, we have seen an uptick in sales.” Industry observers contend that as manufacturers get more clarity on input tax credit, a further reduction in rates is on the cards.

Rajat Wahi, partner and head – consumer, Deloitte Touche Tohmatsu India, said: “Fast moving consumer goods companies are likely to witness their costs coming down with the implementation of GST on overall logistics, warehousing and also enjoy the benefit of input tax credit. All these are likely to improve margins of FMCG companies and demand is also expected to improve as the companies are likely to pass on the benefits partially to consumers.”

  1. B
    Biswajit Kumar Sahoo
    Sep 26, 2017 at 12:59 pm
    I think ther are no visible price reduction so far after implementation of GST. Claims by the Govt is not so far visible.
    Reply
    1. B
      BHUVANESH DURAI
      Sep 26, 2017 at 1:35 am
      why petrol is not included under GST. Coz petrol is the source of money making machine, isn't it?
      Reply
      1. S
        Sunny
        Sep 25, 2017 at 10:56 pm
        Fenku, Dont anyone fall for him Oont k mooh mei zeera ka sambhog se dobara jeetna chhate hai Pure fenku
        Reply
        1. smruti ranjan Dash
          Sep 25, 2017 at 10:50 pm
          Theoretically everything looks good but practically its a depression for common man.its Wound in such a place neither you can hide nor you can show off.
          Reply
          1. M
            Mani
            Sep 25, 2017 at 10:50 pm
            Great. Also do some research honestly post the list of small scale and medium scale industries that are on the verge of closing because of GST demonetisation.
            Reply
            1. L
              Lal
              Sep 25, 2017 at 10:48 pm
              Economy heading towards slowdown see next 6 months pictures will be more clear. Till then enjoy GST benefits good bath nice oil massage after applying cleanser Wash clothes... have cup of tea with biscuits.
              Reply
              1. K
                Kishor karani
                Sep 25, 2017 at 10:43 pm
                Sir by the way of demonatization you save our banking system bank got money from every individual but bankers employees made money by converting black money exchange still people have black money in new currency example Ramrahim Baba again fake currency will be generated by Bangladesh or Pakistan to week our economy again riots in Kashmir again terrorists activity stared again naxelwadi came in action again bank loot , ATM loot started, again house burglary and pick pockets stared , sir please make cashless India people will not spends on unwanted items and have control on money spend if spend they will generate money for India as GST tax way, mostly people spends on land or house , automobile, electronics more than roti kapda , think Sir make India a cashless country, makine India is our second prime, but if automation done unemployment will increase so think twice , unemployment will be big problems for whole world
                Reply
                1. Rishab Jhunjhunwala
                  Sep 25, 2017 at 10:31 pm
                  Where are the list of products which have become expensive after Gst??
                  Reply
                  1. K
                    Kishor karani
                    Sep 25, 2017 at 10:13 pm
                    Sir GST is good , but cashless transaction is on prirority please make a law every ried person spend only 20 cash and 80 on card , every retailer should take only card payment no cash transaction above RS 500/- and no charges form Edc Machin from banks to his customer , only cashless will collect good GST collections and reduce no2 money generation , sir please do not print more currency , let people used their white money on credit or debit card and generate GST collections for India , now a day RTO take fine only by card payment is good move but I observed still many retailers do not have GST no and do turnover of more 50 lacs per anum and transporter still deliver goods without proper documents , make complesory for transporter to take cheque or card payment no cash , customer purchasing goods without bill should be treated as thief(chor)
                    Reply
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                      Om
                      Sep 25, 2017 at 8:33 pm
                      GST will have positive impact once old stock are cleared. It will generate revenue to Govt and as cumulative taxes are removed at different levels, will benifit common man. Those who are against are into politics which none of us should listen. Just understand that merchant and buyers do not have to go to a particular state to buy a particular item. As tax slab is uniform in whole country why to go Delhi or Mumbai?
                      Reply
                      1. S
                        Shravan
                        Sep 26, 2017 at 1:59 am
                        It ll generate revenue to only govt..so dat it can spend on rakshaks n RSS..n Ambanis n rich people..
                        Reply
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