Corporates to pass GST benefits to consumers: CII

CII urges Indian corporates to pass GST benefits to consumers as the council meets to discuss tax cuts, boosting demand ahead of the festive season.

Indian corporates must pass on the benefits of the proposed Goods and Services Tax rate rationalisation to the consumer, the Confederation of Indian Industry (CII) said on Saturday, as the GST Council meets next week to undertake the exercise, which will bring several consumables in the lower duty slabs.

Corporates to pass GST benefits to consumers: CII

“Each rupee of benefit should reach the consumer. CII is quite clear on that,” its director general Chandrajit Banerjee said.

CII’s comments came at a time when the GST Council is scheduled to meet on September 3-4 to discuss the Centre’s proposal to slash tax slabs from four to two, potentially making everyday items significantly cheaper ahead of the festive season.

HT had reported on August 27 that some of the council’s members were concerned that manufacturers and suppliers of goods and services might not immediately pass on the benefits of rate cuts to consumers. They, therefore, wanted to have some anti-profiteering mechanisms because the proposed changes would see 99% of items currently taxed at 12% move to the 5% bracket, while 90% of goods in the 28% slab would shift to 18%—creating substantial scope for businesses to pocket savings rather than reduce prices.

Banerjee, however, said the industry understands the necessity to pass on the benefits of rate cuts to consumers to spur demand and boost growth, hence, restoring the erstwhile National Anti-Profiteering Authority (NAA) is not required.

“There is absolutely no necessity for a separate NAA,” he said. The Indian market would ensure that the “greater benefits of GST 2.0 would reach all – each citizen, and the economy”, he said.

The move comes at an opportune time, as higher purchasing power will push up demand during the festive season, in turn invigorating retail markets, expanding consumption, and generating employment, he added.

“The GST rate cuts significantly reduce the overall tax burden on manufacturers. This enables industry to expand capacity, invest in technology, and add value across the supply chain. For MSMEs and exporters, lower rates and rationalisation of inverted duty structures reduce costs, ease liquidity pressures, and improve competitiveness,” he said.

“This will contribute to the government’s flagship ‘Make in India’ initiative, positioning India more firmly as a global manufacturing hub,” he said. A predictable and moderate tax regime, combined with competitive corporate tax rates and higher personal income tax exemptions, makes India one of the most attractive destinations for both domestic and foreign investors, he added.