FMCG distributors push companies for clear guidelines to smooth GST transition

Mumbai: They wrote the distributors of fast -moving consumer goods to large FMCG companies, and the new goods and services tax (GST) rates asked them to publish open -written instructions and create compensation mechanisms (such as credit notes, price protections or inventory adjustment plans).

All India Consumer Products Distributors Federation (AICPDF) a letter given by a letter, “Distributors are currently holding important stocks purchased in pre -reform GST rates. Companies do not provide a clear mechanism for price adjustment, credit grades or compensation, distributors will be exposed to financial losses in September 22.

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AICPDF represents more than 450,000 Lakh distributors in India, which serves more than 13 million rent stores.

Short -term difficulties

The government’s decision to renew the GST will lead to sharp tax deductions in a number of daily use items. Hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes and shaving cream will now attract 5% GST from 18%. Similarly, butter, ghee, cheese, milk exhibitions, GST on pre -packaged namkeens, bhujia and mixtures will drop from 12% to 5%.

Although it will ultimately benefit consumers at lower prices, companies and distributors and retailers face difficulties such as managing old stocks in the short term and enabling new stocks to reach the market in time.

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AICPDF, “Retailers will continue to keep the inventory purchased in more than 22 September. This can lead to forced liquidation or even disagreements between retailers, distributors and companies.

“The aim of GST reduction is to benefit through lower product prices of consumers. However, there is a risk of confusion and consumer insecurity without a clear, uniform mechanism between commercial channels.

‘No Favouritsm, please’

AICPDF also sought uniformity in practice, so that traditional trade was not disadvantageous with the lack of delayed compensation or clarity, but online and modern trade players were treated preferential.

AICPDF, “Transparent and fair practice will not only protect trade interests, but also the government’s aim for GST reforms will enable the consumer to reach the consumer effectively and uniformly.

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Mint They have previously reported that some companies have developed a smooth transition plans to new GST rates. Authorities in these companies, reflecting reduced taxes updated prices, they have started to press the new product packaging, he said. This new stock is expected to hit retail shelves until 22 September, when revised taxes entered into force.

For example, Colgate-Palmolive India said it plans to give consumers lower prices as soon as possible. Colgate-Palmolive India Ltd, MD & CEO Prabha Narasimhan, after the GST announcement of the government after the government’s decision to reduce the GST on oral care products from 18% to 5%, “We are sure that this step will help us strengthen our collective task to provide brighter, healthier smiles across the country.” He said.