Fast‐moving consumer goods (FMCG) companies have informed tax authorities that they will not reduce the maximum retail prices (MRPs) of low-value packs (Rs 5, Rs 10, Rs 20) despite the impending Goods and Services Tax (GST) rate cuts. Instead, companies say they will increase the quantity (grammage) of products in these packs to pass on the benefits to consumers while preserving established price perceptions.
According to sources speaking to Moneycontrol on condition of anonymity, lowering prices below standard tariff points like Rs 5, Rs 10, or Rs 20 is considered unfeasible, both from consumer psychology and operational perspectives. For example, a biscuit pack currently priced at Rs 20 would see its MRP fall under the new 5% GST slab to about Rs 17.80-18. Instead of reducing the MRP, companies plan to retain the Rs 20‐price tag, increasing pack size to reflect the new tax regime.
Bikaji Foods International’s CFO Rishabh Jain confirmed the intention to restore grammage in impulse packs so that consumers receive the full benefit of tax cuts without seeing a drop in nominal price points.
On the regulatory side, officials from the Finance Ministry are reportedly examining measures to prevent unintended profiteering by companies under the revised GST structure.
The GST overhaul, approved by the 56th GST Council, reduces the tax slab for most daily-use items to 5%, from previous higher rates
