Did the Indian Consumers Really Benefit from GST?

While the long run effect of the GST, across many sectors are yet to be revealed; it looks like the branded FMCG market has been quite a beneficiary of the GST regime. At least the data of last one year indicates multiple benefits in this vertical.

We have analysed a number of categories in the FMCG domain in India in terms of volume, value, tax, benefits passed on to the consumers for last one year and many of the insights has a positive notion for the end consumers.

Overall, the FMCG volumes have increased; while values may not. For most of the categories and for most of the companies and brands. That clearly indicates that consumers are getting more amount against the same amount of money. Or, the relative prices were less than that of a year ago, for many common products.

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So why the companies were so generous to the Indian consumers? If we analyse the GST rates across products in FMCG, and the repeated changes in subsequent months in the tax rates – we see that for about 210 products, the effective tax rates were slashed. Toothpastes, cookies, hair oils, soaps now being taxed at 18% from previous 22%. Premium detergents, personal care products, shampoos etc. are also being taxed at 18% from previous 28%.

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So now the question is – while the benefits passed on to the consumers are enough/ justified or the brands still have rooms to pass on further benefits – given that the tax rates have been cut to a great extent in several premium categories? Read more at https://www.sibiaanalytics.com/blog/did-the-indian-consumers-benefit-from-gst