CA Gaurav Kenkre explains how GST 2.0 marked by sweeping tax rate reductions places the onus on businesses to ensure real price cuts-as authorities ramp up monitoring, compliance, and consumer protection to ensure benefits truly reach the end customer 
The 56th GST Council meeting announcements have been touted as GST 2.0 or the rebirth of GST. One of main focus points of the announcements was an across the board change in GST rates, with most items falling from previously higher GST rates to lower slabs. Thus, for example, a TV which had 28% GST earlier, now can sell for 18% GST i.e. a 10% cut in GST.
This rate cut, obviously has to translate in reduced prices for the customers. This is legally ensured by Section 171 of the CGST Act which has provisions against ‘anti-profiteering.’ It says that any reduction in rate of tax on any supply of goods or services shall be passed on to the recipient by way of commensurate reduction in prices. Thus the prices of such goods have to come down.
The National Anti-Profiteering Authority (NAA), which was constituted under Section 171 of the CGST Act, was the dedicated body which was ensuring that GST rate cuts benefits were passed on to consumers through commensurate price reductions. However, as of 1st April 2025 the government has disbanded the NAA and transferred pending cases to the GST Appellate Tribunal. Despite this, proper officers under GST law continue to hold powers to invoke Section 171 to ensure compliance, investigating and acting against profiteering where businesses fail to reduce prices commensurately.
In fact, the Tax Research Unit (TRU) of the Ministry of Finance has issued a circular instructing CGST field officers to closely monitor and report price changes for 54 commonly used commodities effective 22nd September 2025. These monthly reports are designed to capture comparative data on Maximum Retail Prices (MRP), before and after the GST rate reduction, for six months starting from 30th September 2025. While this monitoring aims to ensure that businesses pass on the full benefit of GST rate cuts to consumers, one hopes that this does not convert itself into various forms of harassment to businesses.
Thus, the onus is now on sellers to re-price their goods in accordance with the new rate cuts. For businesses selling multiple products under one roof (like supermarkets), this seems to be an uphill task.
The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution – is the relevant body tasked with issuing circulars on revising MRPs because it administers the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011. These laws mandate that the Maximum Retail Price (MRP) on packaged goods must always be inclusive of all taxes, including GST, and must be clearly declared on every package. In line with recent GST rate cuts, the Department has recently issued directives requiring manufacturers, packers, and importers to promptly revise MRPs on existing and new stock to reflect the reduced tax rates. The directive states that such persons must, by way of stamping/sticker/online printing, print the revised MRP in such a manner as the old MRP is also visible. The change between the two MRPs should not exceed the change in GST rates. They are also directed to publish at least two advertisements about the new prices, in newspapers.
As per the directive, distributors/wholesaler/retailers are neither authorised, nor instructed to change the MRPs, hence, as at the time of writing this article, it is being presumed that such persons need not alter the MRP stickers. However, due to earlier paras which need them to pass on the benefit of rate cuts, such persons are expected to invoice at a lower price, although the MRP may be at a higher price.
While there is still a lack of complete clarity, most taxpayers are adopting a wait and watch approach and hoping that things will be clear closer to the date of implementation, allowing for smooth changeover to the new GST rates.
In practice, however, the transition may not be seamless, especially for large retailers and multi-product outlets. These businesses now have the unenviable task of realigning prices across diverse inventories.
With stronger price monitoring, mandatory consumer notices, and firm enforcement under GST, fair pricing can be secured. If implemented well, this lends credibility to rate rationalisation and reassures buyers that the benefit is reflected on the invoice, not lost in the chain.
At the same time, it is hoped that the GST department is considerate of the myriad business persons, all of whom may not be as quick and efficient to adopt to the new tax rates.
The author is a Chartered Accountant, ICAI faculty member, former ICAI Goa chairman, GCCI Taxation Committee member, and heads the Taxation vertical at Laghu Udyog Bharati Goa
