GST Reforms: FMCG Sector Seeks 30-Day Transition Window To Slash Retail Prices—Profit Exclusive

India's FMCG industry and allied associations have approached the Ministry of Consumer Affairs seeking more time to implement and pass on benefits to consumers. This comes as the latest GST rate cuts whip up logistical and operational hurdles, industry sources, who do not wish to be named, told NDTV Profit.

Sources also suggest that retail shelves will see a delay in reflecting the impact of the next-gen GST reforms. While the government’s move promises relief to household budgets, industry executives warn the benefits may not show up immediately on store shelves.

From milk and edible oil to biscuits, namkeens and soaps, companies are grappling with the challenge of reworking packaging, managing old inventories and recalibrating supply chains especially for low-unit packs priced at ₹5, ₹10 and ₹20.

According to sources from the industry, while the intent is to pass on the savings, the transition will take weeks, if not longer, to iron out challenges. In the interim, companies may resort to offering free packs, combo deals, or discounts rather than direct price cuts to ensure compliance while avoiding wastage of existing stock.

For consumers, this means the GST relief could come in phases, with some categories seeing faster rollouts than others. While household budgets stand to benefit, the timeline for full transmission of price cuts will depend on how quickly companies can recalibrate supply chains and distribution networks.

At the 56th GST Council meeting, major rate reductions were cleared for everyday FMCG products to ease household budgets. A wide basket of essentials including UHT milk, paneer, parathas, namkeens, biscuits, butter, ghee, sugar confections, cornflakes and condiments that were moved to lower GST slabs of 5% or even zero.

Personal care staples such as soaps, shampoos, toothpaste, toothbrushes, hair oil and talcum powder also saw sharp reductions, from 18% down to 5%. The Council said these cuts are meant to ensure direct savings for consumers on daily-use items, but companies are expected to take time to reprint packaging, clear existing stock and recalibrate supply chains before the full benefit is visible in the market.