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Businesses Scramble To Relabel, Update Systems Amid GST 2.0 Rate Changes From September 22
Businesses Scramble To Relabel, Update Systems Amid GST 2.0 Rate Changes From September 22
Companies, distributors, and kirana shops are scrambling to be prepared for a major indirect tax overhaul from Monday, September 22, when GST 2.0, the rationalization of rates into two slabs of 5 per cent and 18 per cent, comes into effect. Businesses are required to update their system, relabel goods, and align distribution networks, ensuring a seamless and efficient transition to the new indirect tax regime.
The question is whether businesses are ready for this major overhaul?
Pharmacies are facing a mammoth task of relabeling all medicine packs and updating billing software after GST council reduced the tax rate on drugs and medical items to 5 per cent.
Starting Monday, September 22, medicine will become cheaper due to lower GST rates. To give the most benefit to consumers, manufacturers and distributors have announced to cut the prices.
Piyush Tyagi, owner of Healthcare Pharmacy in Delhi, told CNBC TV-18 that they've got the revised lists from distributors, but updating software and relabeling medicine strips is tricky. Customers expect lower bills immediately, so the transition needs to be quick and clear.
CNBC TV-18 report noted that the All India Organisation of Chemists and Druggists (AIOCD) has asked pharmaceutical companies to issue QR-code-based price lists.
This change will let retailers verify the revised prices immediately, without waiting for relabeled stock. Smaller chemist shops and kirana stores, however, have been instructed to sell products at the reduced rates even if old MRPs are printed on the labels — a step that may cause some confusion at billing counters during the initial rollout.
FMGC companies have warned that customers shouldn't expect an immediate price cut on daily-use products, as fresh stocks with lower prices will take time to fill up on the shelves.
Pushpendra Pratap, owner of Aaradhya Enterprises, an FMCG distribution firm told CNBC TV-18 that Companies have started informing us about new MRPs. Fresh stock will carry revised prices, but older goods already on shelves can't be relabeled overnight. It will take some time for consumers to see the full impact.
Experts say that new batches with revised MRPs will gradually take over old batches, giving price benefits to customers.
Automakers have already announced the price cuts for major models to ensure passing down the lower GST benefits.
Deepanshu Singh of Karma Hyundai said CNBC TV-18 that any car invoiced after the 22nd will automatically reflect the revised GST. Customers are already asking how much they can save if they wait a couple of days.
Dealers, however, note that with the removal of the compensation cess, uncertainty remains over adjusting tax credits on cars already in stock — a gap that could hit margins.
Source: News18
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