Team SKM,
The government’s recent GST rationalization has restructured tax slabs across multiple industries, aiming to simplify compliance and boost consumption. The impact of these changes is particularly visible in FMCG, healthcare, and consumer electronics. The recent GST rationalization move by the government has simplified slabs and changed rates across industries. While this brings clarity, the impact is not the same for every sector. Let’s break it down in simple terms.
FMCG: Everyday Goods Get a Breather
For FMCG companies, GST rationalization is largely good news. Many daily-use products now fall under lower tax slabs. This means:
- Lower prices for consumers → Better affordability and faster stock rotation.
- Higher demand during festive season → More sales volume for companies.
- Cash flow improvement → Less working capital stuck in tax adjustments.
But not all items are cheaper. For example, cosmetics and some premium household products may not see much benefit. Businesses will also need to relabel packaging and manage old stock carefully to avoid compliance issues.
Healthcare: Relief in Supplies, But Not a Complete Cure
Healthcare has always been a sensitive sector. With rationalization, many medical consumables and equipment now attract a lower GST. The benefit?
- Reduced procurement cost for hospitals and clinics.
- Slightly lower treatment cost for patients in some cases.
But here’s the catch: healthcare challenges are bigger than GST — manpower shortages, insurance disputes, and regulatory hurdles continue. So, while GST relief helps, it’s not a magic fix for the sector.
Consumer Electronics: Big Relief for Buyers
If you’re planning to buy a TV, fridge, or AC, GST rationalization is your friend. Most electronics that were earlier taxed at 28% are now at 18%. The results:
- Lower upfront cost → Encouraging people to upgrade appliances.
- Demand push in smaller cities where affordability matters most.
- Simpler classification → Less confusion for manufacturers and importers.
Retailers may either pass on the full tax benefit to customers or retain part of it to boost their margins. In either case, sales volumes are expected to rise.
What Should Businesses Do? (A CA’s Advice)
- Pricing Strategy: Decide how much GST savings to pass on — balance between customer benefit and profitability.
- Stock Management: Relabel or reprice old stock carefully; wrong invoicing can attract penalties.
- Update Systems: Ensure your accounting software/ERP reflects the new GST slabs.
- Stay Transparent: Communicate benefits clearly to consumers — it builds trust and drives demand.
Final Thoughts
GST rationalisation is a welcome step. For FMCG, it means faster growth. For healthcare, it means cost relief. For consumer electronics, it means a real boost in demand.
As professionals, our role is to guide businesses in using these changes smartly — not just for compliance, but also for growth and customer trust.