GST 2.0: The government is now monitoring the prices of everyday use items like shampoo, pulses, butter and toothpaste. For this, e-commerce platforms have also been included in the scope of investigation. The objective is to ensure that the benefits of cutting GST rates reach consumers completely and correctly.
What is the matter?
After the recently implemented GST deduction (from 22 September), about 99% of the prices of about 99% of the goods should have been reduced. Complaints received that some e-commerce companies are not providing full benefits to consumers. According to news agency PTI, the government has informally warned many e-commerce operators to bring transparency in prices.
The Finance Ministry has ordered the Central GST officials to submit a monthly report of the prices of 54 common goods (brand-wise MRP). The first report was to be submitted to the CBIC (Central Indirect Taxes and Customs Board) by Tuesday. Listed items include shampoo, toothpaste, butter, tomato ketchup, jam, ice cream, AC, TV, cement, diagnostic kit, thermometer, crayon etc.
Companies argument
Many e-commerce platforms described prices as “technical disturbances” after GST cuts. At the same time, some companies themselves have come forward and claimed that they are benefiting consumers by reducing prices. It is clear that the government is keeping a close watch on the e-commerce operators despite the weakening of the “anti-profit system”, so that the general public gets direct benefit of GST cut.
The strict monitoring of the government will not only affect consumers but can also be felt on shares and investors of e-commerce companies. Increasing monitoring of e-commerce companies and pressure to cut prices can affect their profits. Due to doubt among investors, there may be fluctuations in the stock in stocks. If companies cannot increase prices or have to give full benefit of GST deduction to consumers, then the profit margin can be reduced. The company’s financial health may be affected in a long time.
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