The Central Board of Indirect Taxes and Customs has written to over 100 companies, including Colgate-Palmolive, Dabur, Nestle, and Hindustan Unilever, and 15 restaurants like McDonald’s and Cafe Coffee Day to pass on the benefits of the reduction in the Goods and Services Tax rates to customers, Business Standard reported on Monday.
On November 10, the GST Council had cut rates on 178 products, leaving only 50 under the 28%-tax slab. The new rates came into effect from November 15.
“As an industry leader, I appeal to you to join hands with the government in benefiting the common man by passing on the benefit of the reduced GST rates, through commensurate reduction in the prices of your products,” CBEC chairperson Vanjana Sarna said in her letter to the companies. The letter comes after reports said that restaurants were charging high rates despite the cut in taxes.
“While it [adhering to the modified tax rates] is a legal requirement, you will agree that for all citizens this is an important social responsibility,” Sarna told companies. “It would be most helpful if the reduced prices are also given wide publicity.”
Finance Secretary Hasmukh Adhia told The Economic Times on Monday that it was the responsibility of the companies to ensure that the benefits of the tax cuts were passed on to the consumers. “It is the company’s responsibility to ensure that its entire retail chain follows its directives on pricing,” he said. “If a trader is not selling a good at revised Maximum Retail Price, then it is the company’s responsibility.”