New GST reforms with a two-slab structure have taken effect, leading to price reductions on many products, including Milma dairy items.
Thiruvananthapuram: Finance Minister K.N. Balagopal has said that states, including Kerala, had a say in shaping the GST Council’s latest decision. He pointed out that not a single state raised objections regarding the cut in product prices, stressing that the benefits should reach the public. However, the minister warned that companies often fail to pass on such advantages to consumers – a concern even acknowledged by Union ministers. He cautioned that, without effective monitoring, the situation could revert to how it was before within a few months.
Balagopal also spoke about the lack of proper studies carried out while implementing GST reforms. According to him, Kerala alone could face revenue losses ranging between Rs 50,000 crore and Rs 2 lakh crore. Such a scenario, he argued, would severely impact state finances, directly affecting welfare pensions, employee salaries, and development projects. “If 41 percent of state revenues come from GST and that share shrinks, the crisis will be immense,” he remarked. He added that consumers can only benefit from cheaper goods if they continue to have stable sources of income like salaries.
GST reforms take effect
From today, the revised GST structure, with only two slabs – 5 percent and 18 percent – officially comes into force across the country. The central government has clarified that 99 percent of goods now fall under the 5 percent category. Authorities have assured that strict market monitoring will be in place to ensure that companies pass on the benefit of reductions to customers.
With dairy products exempted from GST, Milma has announced price cuts for its items starting today. A one-litre packet of Milma ghee will now cost Rs 45 less, while 400 grams of butter has dropped from Rs 240 to Rs 225. Similarly, 500 grams of paneer will now be priced at Rs 234 instead of Rs 245, and a litre of vanilla ice cream has been reduced from Rs 220 to Rs 196. Overall, more than a hundred products, including ghee, butter, paneer, and ice cream, will see a fall in price.
Impact on Kerala lottery
Meanwhile, GST on lottery tickets has been increased from 28 percent to 40 percent. But, the finance department has clarified that ticket prices will not be raised. Instead, adjustments will be made by reducing the prize pool and cutting agents’ commissions, with the biggest hit falling on commission margins.
Political reaction
The central government has reiterated that strict monitoring will ensure consumers benefit from these changes. Yet, criticism has already surfaced. Former Uttar Pradesh Chief Minister Akhilesh Yadav questioned whether the Centre would also compensate states by returning the excess GST it had collected in previous years.