LocalCircles survey shows full pass-through of GST rate cuts remains weak in processed foods and healthcare, while autos and electronics see stronger transmission
While more consumers are beginning to benefit from GST 2.0 reforms, certain sectors such as processed foods and medicines still require stronger action from brands, supply chains, and last-mile retailers to ensure full pass-through of tax reductions, according to LocalCircles survey. Only 22 per cent of consumers reported receiving the full benefit of the GST rate reduction on packaged foods, while another 32 per cent received partial benefits.
This represents a 50 per cent drop in full-benefit transmission compared to earlier weeks, when 40 per cent had reported receiving full benefits, as per LocalCircles reports.
The proportion of consumers reporting partial benefits rose from 18 per cent to 32 per cent, while those seeing no change in prices increased slightly. Analysts attribute this decline to reduced enforcement and slow retail-level adjustments. Overall, the share of consumers reporting any benefit fell from 58 per cent to 54 per cent.
Medicines Remain The Worst Performing Sector
The medicine sector continues to lag, with just 27 per cent of consumers confirming full GST benefits and another 27 per cent receiving partial relief. Previously, 60 per cent of consumers had reported receiving partial or full benefits, which dropped to 54 per cent in the latest survey.
Meanwhile, those indicating no benefit rose from 28 per cent to 35 per cent. Delayed price revisions and older inventories in the healthcare supply chain are slowing the transmission of benefits.
White Goods and Electronics Recover
Appliances, white goods, and consumer electronics showed signs of recovery. Currently, 33 per cent of consumers reported receiving full benefits, with another 32 per cent receiving partial relief. Retailers reportedly passed on tax reductions via discounts and festive promotions, marking a rebound in benefit transmission.
The automobile sector continues to perform best, with 52 per cent of consumers receiving full GST benefits and 24 per cent receiving partial relief. In total, 75 per cent of consumers reported receiving some benefit, although no benefit increased from 12 per cent to 17 per cent compared to earlier weeks.
