1 in 3 consumers say GST rate reduction benefits now reaching them


  • • Many new profiteering complaints received against brands in the last 30 days

April 23, 2019, New Delhi: It appears that finally a third of the consumers are starting to see the benefits of the GST rate reductions. The 3 big rate reductions were implemented by the Government in Nov 17, July 18 and recently in Jan 19. According to the latest survey by LocalCircles, which hosts the Anti-Profiteering online community for the National Anti-Profiteering Authority, the trends are finally showing signs of increased compliance by brands.

Over 28,000 votes from 16,000 consumers were received from across India on 3 critical questions on whether they were experiencing benefits of GST rate reduction.

GST on restaurant bills was reduced from 18% to 5% in Nov 2017 with the withdrawal of Input Tax Credit for restaurants. Citizens were asked what their most common experience has been since then. 47% said that no benefit of the lower GST is being passed on as the base prices has been increased. 19% said restaurants are passing full benefits of the lower tax to the consumers while 15% said only partial benefit is being passed on. 19% were unsure.

Only 34% consumers believe restaurants are passing GST tax reduction benefits to them

Poll graphics showing that only 34% consumers believe restaurants are passing GST tax reduction benefits to them

The comparison indicates that the number of consumers saying that the restaurants are not passing benefits of reduced GST to them has reduced from 51% in January 2018 to 47% in April 2019. Those saying restaurants are passing the benefits, has shown some improvement and stands at 34%, when compared with the January 19 pulse check.

Most restaurants still not passing the benefit of reduced GST rate to consumers

Poll graphics showing that most restaurants still not passing the benefit of reduced GST rate to consumers

Only 30% consumers believe brands are passing the Nov 2017 GST tax reduction benefits to them

Poll graphics showing that only 30% consumers believe brands are passing the Nov 2017 GST tax reduction benefits to them

GST rate on many items like shampoo, cosmetics, groceries etc. was reduced from 28% to 18% in Nov 2017. Consumers were asked if the brands had passed it on to them. 45% said no benefits were being passed as the base price of products has been increased and 8% said full benefits were being passed on. 22% said only partial benefit of the lower tax is being passed on while 25% were unsure about it.

When compared with the January 2019 pulse check, number of people saying brands are passing on the benefits on November 2017 GST rate cut on cosmetics, groceries etc. have increased from 27% to 30% in April 2019.

While more brands are now passing benefit of reduced GST rate to consumers, majority still profiteering

Poll graphics showing that while more brands are now passing benefit of reduced GST rate to consumers, majority still profiteering

This indicates that while there is a long way to go before all brands pass GST rate reduction benefits to the consumers, the number of consumers receiving them is steadily rising.

GST rates on items like paints, home appliances, televisions etc. were reduced from 28% to 18% in July 2018. 40% consumers still say that none of these benefits are being passed on to the them as the companies have increased the base price of the product. 10% said full benefits of lower tax are being passed on to the consumer while 19% say only partial benefits are being passed on. 31% were unsure.

Only 29% consumers believe brands are passing the July 2018 GST tax reduction benefits to them

Poll graphics showing that only 29% consumers believe brands are passing the July 2018 GST tax reduction benefits to them

26% citizens in the January 19 pulse check had said that brands are passing on the benefits of July 2018 GST rate cuts to the consumer. This number has increased to 29% this month, again indicating that more consumers are receiving the benefit of GST rate reduction.

While more brands are now passing benefit of reduced GST rate to consumers, majority still profiteering

Poll graphics showing that while more brands are now passing benefit of reduced GST rate to consumers, majority still profiteering

LocalCircles had also written to 25+ GST commissioners from across the country that cover manufacturing of most of the products that were included in the Nov 17 and July 18 rate reductions, requesting them to communicate to businesses in their areas about pro-actively passing the GST benefits to consumers via revised MRPs.

There has been a surge in the profiteering complaints received on LocalCircles with consumers sharing pictures/screenshots of products, where the manufacturer has not reduced the price even after the GST on that product was reduced by the Government. These products range from FMCG to electronics to restaurants and even movie halls. All these complaints were duly passed on to the National Anti-Profiteering Authority in the prescribed format for action by LocalCircles.

Overall, it appears that many white goods and FMCG brands are showing improvement in passing GST rate cuts to consumers. This is a positive trend and will definitely bring the household cost of the consumers down in the longer run.

Summary of all polls

1 in 3 consumers now receiving benefits of GST rate reduction in the last 15 months

Poll Summary graphics showing that 1 in 3 consumers now receiving benefits of GST rate reduction in the last 15 months

About LocalCircles

LocalCircles takes Social Media to the next level and makes it about Communities, Governance and Utility. It enables citizens to connect with communities for most aspects of urban daily life like Neighborhood, Constituency, City, Government, Causes, Interests and Needs, seek information/assistance when needed, come together for various initiatives and improve their urban daily life. LocalCircles is free for citizens and always will be!

Akshay Gupta - media@localcircles.com, +91-8585909866

All content in this report is a copyright of LocalCircles. Any reproduction or redistribution of the graphics or the data therein requires the LocalCircles logo to be carried along with it. In case any violation is observed LocalCircles reserves the right to take legal action.

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