6 weeks into GST 2.0, consumers still await full price relief on essentials

Six weeks after the rollout of revised Goods and Services Tax (GST) rates, a majority of Indian consumers say they have yet to feel the benefits of lower taxes on several essential products — particularly packaged foods and medicines — according to a nationwide survey conducted by community social platform LocalCircles. The survey highlights a growing mismatch between policy-level rate reductions announced by the government and their translation into lower on-ground retail prices.The GST Council had lowered tax rates on around 80 goods and services from September 22 as part of the GST 2.0 exercise aimed at boosting consumption and easing household expenses ahead of the festive season. For packaged food and medicines, rates were cut sharply from 12–18% to 5%, while appliances and electronics saw a reduction from 28% to 18%. The automobile sector received a 10 percentage point rate cut across most vehicle categories.However, data from over 53,000 consumer respondents across 342 districts indicate mixed pass-through of these benefits. Essentials lag the most: Food and medicines see weak compliance.The biggest concern arises from day-to-day spending categories. On packaged food products, only 13% of respondents reported receiving the full benefit of lower taxes. Another 33% acknowledged some reduction in prices, but a significant 42% said they received no benefit at all.Medicines fare even worse. Despite clear directions from the National Pharmaceutical Pricing Authority (NPPA) for manufacturers and distributors to revise MRPs or issue supplementary price lists reflecting reduced GST, 49% of the consumers surveyed reported no price reduction in the medicines they purchased post-September 22. Just 21% confirmed receiving full relief, while 30% said the benefit was only partially passed on.Also Read: Small, low-risk businesses to get GST registration within three days beginning Nov 1Consumers on social media have increasingly flagged instances of chemists charging pre-GST-2.0 MRPs despite the revised tax structure. Retailers say they are sitting on old inventory purchased at higher tax rates and risk losses if they cut prices without manufacturer compensation or input tax credit (ITC) support. Smaller chemists — especially those under the composition scheme or unregistered in GST — cannot claim ITC and are pushing for a three-month grace period to clear old stock without penalties.White goods and electronics: Better than essentials, but the gap persistsIn higher-value categories like appliances, consumer electronics and white goods, price transmission appears more visible but still imperfect. The survey shows that 33% of consumers saw full benefits of the reduction from 28% to 18%, and another 33% saw partial relief. However, 28% still reported no change in prices. Retailers argue that pricing cycles for big-ticket products take time to adjust, especially in cases where stock was procured weeks in advance.Given that these goods are often purchased after lengthy deliberation, incomplete pass-through continues to affect consumer sentiment even at the premium end of consumption.Vehicles lead compliance — festive sales reflect confidence boostThe automotive industry has done comparatively better in executing downward price adjustments. According to the survey, 47% of vehicle buyers received the full GST benefit, and 34% received it partially. Only 14% stated they received no reduction.
Also Read: From battlefield to global markets: How GST 2.0 unlocks India’s drone potentialThis aligns with the buoyant market response: passenger vehicle sales crossed 4.7 lakh units in October, marking a festive record. Electric vehicle sales also picked up sharply after two months of slowdown. Dealerships and manufacturers, having operational billing systems that respond quickly to tax changes, appear to have executed GST 2.0 adjustments more efficiently than other sectors.Implementation delays and supply chain resistance at the coreExperts say the delays reflect commercial friction between retailers and manufacturers over who shoulders the short-term revenue impact. FMCG distributors are reported to have slowed down purchases in the July–September period, anticipating new price lists, while retailers waited for brands to introduce revised MRPs before adjusting margins.LocalCircles’ analysis suggests that while the central policy intent is clearly oriented toward consumer benefit, enforcement gaps across pricing compliance, stock audit cycles and supply chain alignment have created uneven impact.Also Read: GST collections touch ₹1.95 lakh crore in October; imports drive 4.6% YoY growth”GST 2.0 has laid the groundwork for consumer relief and improved purchasing power, but for a significant share of households, the benefits remain aspirational,” the survey report notes.Survey snapshot53,000+ responses from 342 districtsGender: 63% men, 37% womenGeography: 41% Tier-1 cities, 29% Tier-2, 30% Tier-3/4/5 & ruralConducted via the LocalCircles citizen engagement platformPolicy takeaway: Pass-through is still a work in progressThe survey underscores a key policy execution challenge — while demand-oriented tax cuts can spark consumption, slow price transmission can blunt their economic purpose. For households already battling inflationary pressures, the gap between announcements and actual savings has become a point of growing frustration.As the festive season continues and older inventories are steadily cleared, industry and consumer forums expect greater compliance over the next quarter. The government may also need to strengthen monitoring and consider transitional support to ensure that GST relief truly reaches consumer wallets — not just product catalogues.

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