Govt cracks down on e-commerce platforms for failing to pass on GST cuts

The Finance Ministry and the Central Board of Indirect Taxes and Customs (CBIC) have launched a crackdown on e-commerce platforms for failing to pass on the benefits of recent Goods and Services Tax (GST) rate cuts, sources told CNBC-TV18.The action follows a series of consumer complaints that certain e-commerce operators increased prices even after the GST rate reduction on select items took effect from September 22. According to officials, the ministry and CBIC are keeping a close watch on online pricing to check whether commensurate reductions have been made before and after the new tax structure came into force.“Complaints were received, platforms have been cautioned, and they remain under strict watch,” one source confirmed. The government has underscored that profiteering at the expense of consumers will not be tolerated, and both offline retailers and online marketplaces are under scrutiny to ensure that tax relief is genuinely passed on.The focus of this monitoring exercise is on daily-use fast-moving consumer goods (FMCG) and essentials ranging from shampoo, toothpaste, and pulses to packaged food items.Amid complaints of inadequate price cuts on some platforms, officials said certain operators have been informally ticked off for the prices they were offering.When confronted about discrepancies, some platforms reportedly cited “technical glitches” as the reason. “Government is keeping a strict vigil,” a source said.The GST rate revision, effective September 22, collapsed the earlier four-tier tax system of 5%, 12%, 18%, and 28% into a simplified two-tier structure of 5% and 18%. As a result, 99% of daily-use items are expected to see a reduction in price.While the anti-profiteering mechanism has not been formally activated for complaints under the new regime, the government has been relying on its own monitoring and market intelligence to track compliance. Industry sources also noted that many companies have voluntarily announced price reductions to reflect the tax cuts.Separately, the Finance Ministry had, on September 9, directed Central GST field officers to submit a monthly report on price changes in 54 commonly used items. These include butter, shampoo, toothpaste, tomato ketchup, jams, ice cream, air conditioners, televisions, diagnostic kits, glucometers, bandages, thermometers, erasers, crayons, and cement.The first comparative report on Maximum Retail Prices (MRPs), brand-wise, is scheduled to be submitted to the CBIC by 30th September.With price scrutiny intensifying, the government is signaling that compliance with the new tax structure is non-negotiable. By keeping both e-commerce and physical retail channels under surveillance, it aims to ensure that consumers—not companies—reap the benefits of GST rationalisation.Amid complaints of not commensurate price reduction of daily essential items being sold on some e-commerce platforms, sources said that the government has informally ticked off certain e-commerce operators for the prices they are offering on certain items.
Also Read: Govt faces thousands of complaints over non-passage of GST benefits after rate cuts

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