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GST cuts: Get more for same price

The next time you visit the market to shop for your daily essentials, you may see bigger pack sizes at the same price as some consumer goods companies are planning to increase the weight of their products to pass on gains from revised GST rates. Authorities had written to companies to pass on the benefits of cuts in GST to consumers. And companies are now devising ways to comply with these requests. The government is keen to ensure that consumers benefit from the sharp reduction in GST rates on more than 200 products. An anti-profiteering entity has also been set up, which will keep a hawk eye on companies and address consumer grievances if firms do not pass on the benefits of lower GST rates. A spokesperson for Mondelez India, the maker of Bournvita, Cadbury and Oreo cookies, said, "To pass on the benefits to our consumers, we are either reducing prices where the coinage is not an issue or increasing grammage, which means giving more product to the consumer at the same price. This is important for a large number of our products at price points like Re 1, Rs 2, Rs 5 and Rs 10 — which are critical for consumer convenience and value." Similarly, Hindustan Unilever (HUL), the maker of daily household products including Rin, Domex and Dove, has increased the grammage on Rin Powder Rs-10 pack from 125gm to 140gm. "This has also been advertised to ensure consumers are aware of the change," said an HUL spokesperson. In addition, around 600 of HUL's stock keeping units (SKUs) are being impacted by the reduction in maximum retail price (MRP), or increase in weight. "As we pass on GST rate reductions, the benefits to consumers across categories will be between the range of 7% and 10%," the spokesperson said. "We are confident that the transition of a sizeable part of our portfolio to reduced MRPs/increased grammage will be completed in the next few weeks." Other companies that TOI reached out to were Marico, ITC and GSK, which did not respond to queries on weight-increase of products. Pratik Jain, partner and leader indirect tax at consulting firm PwC, said, "From a consumer standpoint, increase in weight also results in effective reduction of price, hence it should be viewed as sufficient compliance of anti-profiteering laws."

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