It’s been over a month since the rollout of the unified tax regime, Goods and Services Tax (GST) in the country still everyone is wondering what would be the overall effect of GST on the industry. The government also has been closely watching daily price changes in more than two dozen essential commodities to check any abnormal price movement.
Inflation has been in a declining trend after demonetisation and the CPI inflation continued to decline after GST as well to reach its lowest level in June.
According to government's statements and reports in the media, there has been no big instance of supply disruptions. The rollout of GST has been smooth so far and the tax department is also working hard to ease any possible bottlenecks that remain unresolved.
Currently, there is little clarity on whether the benefits of GST are actually transmitting to the end users. Therefore, states have been demanding to study the matter and come up with more clarification for the production companies.
Amid pressure from the states, GST Council is likely to start publishing rates of various products to production companies to pass on gains, including those from input tax credit. The issue got highlighted when states such as Kerala, West Bengal and Bihar demanded to lay down the process and pressurise companies to reduce prices as they were alleged of not reducing the product prices post GST.
MRP (Maximum Retail Price) is the highest price that can be charged for a product, however, in some cases, tax rates post GST have altered MRP. Hope, the GST Council comes up with an effective price control mechanism to address these discrepancies.