‘GST rate cut benefits fully passed on to consumers, govt monitoring prices’: Sitharaman on ‘GST Bachat Utsav’

New Delhi: Finance minister Nirmala Sitharaman on Saturday said the government is monitoring the prices of 54 daily-use items and the benefits of GST rate cuts effective September 22 have been fully passed on to consumers in the form of reduced prices.

Addressing a press conference on ‘GST Bachat Utsav’, she also said in quite a few cases, a “more-than-expected” price reduction due to GST reforms has been passed on to end consumers.

“On these 54 items on which we have been getting inputs from the zonal areas... we are convinced that on every such items the benefits are being fully passed on to consumers,” Sitharaman said in a joint conference with Commerce and Industry Minister Piyush Goyal and IT Minister Ashwini Vaishnaw.

Effective September 22, Goods and Services Tax (GST) have become a two-tier tax structure of 5 and 18 per cent, and a special 40 per cent rate for ultra-luxury items. Prior to this, GST was taxed at rates of 5, 12, 18, and 28 per cent, plus a compensation cess on luxury items.

This has resulted in slashing of prices of as many as 375 items ranging from toothpaste and shampoo to cars and television sets.

Giving data on auto sales, Sitharaman said GST rate reduction has helped in increasing consumer purchases.

GST rates on small cars has been slashed to 18 per cent, while on large cars and SUVs the rate has been brought down to 40 per cent. Prior to GST rate cut, the total tax incidence on cars, depending on engine capacity and length, ranged from 29 per cent for small petrol cars to 50 per cent for SUVs.

Sharing data of price reduction post GST rate cut, Sitharaman said in items like shampoo, talcum powder, face

powder, table, kitchenware, and utensils made of iron, steel

and copper, besides toys, umbrellas -- all saw more-than-expected price reduction.

Sitharaman said except for Portland variety of cement of one or two brands, all cement companies have reduced prices. GST on cement, which is the largest input cost in construction activities, was cut from 28 per cent to 18 per cent.

Sitharaman also said the Department of Consumer Affairs has received 3,169 complaints related to non-reduction in prices commensurate with GST cut. Of this, 3,075 complaints have been forwarded to nodal officers in the Central Board of Indirect Taxes and Customs (CBIC). Total 94 complaints have been resolved by the department.

The department will enable a functionality on the grievance reporting portal so that the complaints can be forwarded to the chief commissioners of the respective zones from where complaints have come in, the minister said.