Hindustan Unilever follows Godrej with GST cuts led price reductions

By

Isabelle Crossley

Published
Nov 24, 2017

Following other brands such as Godrej, Hindustan Unilever has announced that it will pass on the GST Council’s recent rate cuts to the consumer in product categories including makeup.

On November 24, Hindustan Unilever announced that they will be reducing prices in a number of their product categories by between seven and ten percent. The business’ move follows Godrej’s decision to do the same earlier this week as both consumer goods giants are seeking to entice shoppers with lower prices.

The Goods and Services Tax (GST) Council recently lowered the tax rate from 28 percent to 18 percent on many consumer non-durable items such as cosmetics, detergents, deodorants, and packaged foods. This had followed months of pleas from businesses for a return to rates more similar to those under the previous Value Added Tax (VAT) system that was in place until the GST’s implementation in July. Hindustan Unilever will now pass this discount on to the consumer in the hopes that consumer spending will pick up again after the post-GST slump of the past financial quarter.

The product categories that Hindustan Unilever will be encompass 600 stock keeping units (SKUs) and, while most items will be reduced by between seven and ten percent, some will see an almost 20 percent reduction. Hindustan Unilever subsidiaries such as Fair and Lovely and Sunsilk will also see reductions across their product categories.

Sanjiv Mehta, Hindustan Unilever’s Chief Executive, said about their business’ plans: “The recent rate reductions have come across multiple categories for us, such as shampoos, detergent powders, cosmetics, instant coffee, skin care, deodorants, dishwash bars and packaged foods. We are committed to ensuring that all benefits to the business in terms of the reduction in GST rates will be passed on to the consumers in the form of lower prices or increased grammage.”