Actually, FMCG companies fear that they may have to face penalties after GST has been implemented due to their profit growth. Because of this, the companies are taking the middle course of their profits and penalties. In the provisions set out to stop profiteering under GST, it is also mentioned that after the GST is implemented, if any profits of any company or vendor is increased, then it will have to reach its customers.

Many FMCG companies believe that after the new tax system is implemented, their profits may increase. In such cases, companies are trying to rein in their profits so that after 1 July, when they fill up the tax they can prove that their revenue has not increased due to the new tax system. Contract makers, corporate insiders, tax experts and government officials of FMCG say that FMCG companies are pursuing double and triple-level strategies to avoid certain provisions against profiteering.

One of these ways is also to reduce the weight of the products. Under this measure, the company can weigh 180 grams of shampoo bottle up to 175 grams. However, the maximum retail price of the products will remain the same. Apart from this, companies are also demanding price increases from their contract manufacturers. Companies say input costs have increased.

“The companies are demanding to pay more than their vendors so that they can benefit the customers,” said a person familiar with the entire matter. Experts say that through this, companies can say that due to the rise in inflation and material costs, the vendors have increased this in the rates.