'People should see a reduction in prices after the GST cut', Delhi High Court reprimanded Hindustan Unilever:

News Topical, Digital Desk : Hearing a case involving Hindustan Unilever, the Delhi High Court stated that the benefits of reduced GST rates should be passed on to the public. The court clarified that price reductions are necessary. Increasing product quantities while maintaining the old price is not the right approach. The Delhi High Court issued this ruling on a petition filed by M/s Sharma Trading, a distribution company of Hindustan Unilever Limited.

In its decision, the court stated that the primary purpose of reducing GST rates is to make goods affordable for the general public. Therefore, this objective will be achieved only if prices are reduced.

What is the matter?

Following the 2017 GST rate revision, the tax rate on Vaseline was reduced from 28% to 18%. However, Vaseline maintained its product prices. Instead of reducing prices, the company increased the quantity of its product, raising the base price to ₹14.11 per unit. In 2018, the National Anti-Profiteering Authority imposed a fine on the firm along with 18% interest and ordered it to deposit ₹550,186 into the Consumer Welfare Fund. The firm filed a petition against this order, which the court dismissed and upheld the fine.

What did the High Court say?

Delivering the verdict on September 23 (Friday), a bench of Justice Pratibha M Singh and Justice Shail Jain said that the basic objective of reducing GST rates is to make goods and services more affordable to buyers. Such practices defeat the purpose of GST reduction. They amount to fraud and limit consumer choices. The decision assumes significance in view of the major changes made by the GST Council in the tax structure effective September 22, 2025, from a multi-slab system to primarily two rates, 5% and 18%, and a 40% rate for luxury/fair goods.