Sanitary Napkins will see marginal price decline
Here is how it will work according to me:
Sanitary Napkins Exempt from GST
Base product cost = INR 70
13% avg GST on inputs = INR 9
Base Price INR 79
Margin INR 30
MRP - INR 109
Sanitary Napkins Taxed at 12% (Earlier)
Sales Price INR 100 + 12% GST = INR 112
Inputs INR 70 + 13% avg GST = INR 79
Gross Profit = INR 112-79 = INR 33
Margin = INR 33 - INR 3 (GST on Profit)
MRP - INR 112
So if manufacturer keeps profit the same sanitary napkins prices will only reduce by 2% after they becoming GSt exempt. more
Sanitary Napkins Exempt from GST
Base product cost = INR 70
13% avg GST on inputs = INR 9
Base Price INR 79
Margin INR 30
MRP - INR 109
Sanitary Napkins Taxed at 12% (Earlier)
Sales Price INR 100 + 12% GST = INR 112
Inputs INR 70 + 13% avg GST = INR 79
Gross Profit = INR 112-79 = INR 33
Margin = INR 33 - INR 3 (GST on Profit)
MRP - INR 112
So if manufacturer keeps profit the same sanitary napkins prices will only reduce by 2% after they becoming GSt exempt. more
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View all 17 comments Below 17 comments
It is really surprising, as to how the manufacturers manage to keep the price at the old rate and black mail the consumers. more
Jul 24
The Government never wanted any advantage to Common Citizens. The governments in India have never been sensitive to the needs of common citizens. The governments have always considered the points of business class and the government officials only. Our representatives, the so called Leaders come forward to make their own life comfortable and they hardly work for the citizens. Change in this aspect will come only by peaceful revolution and by non-cooperation with the government. more
Jul 24
In my view, the Govt is likely to keep the product under the category of exempt supply so that the company does not get any benefit of input tax credit. In such scenario the price reduction could be only Rs. 2 or so and at the same time the citizens have been given feeling that the Govt has compromised on 12% GST. I still keep the fingers crossed as to whether the Govt would be keeping this product under the category of zero rated supply so as to maximize the benefits to the citizens. more
Jul 24
