GST Rate Tweaks Set to Propel ITC’s Food Business Growth

Speedy Summary

• The recent rationalisation of GST rates will benefit ITC Limited’s food division,making its nutritional products more affordable.
• Hemant Malik, Executive director of ITC Limited, stated that price cuts across ITC’s FMCG portfolio will pass on the benefits too consumers.
• Effective September 22, revised GST rates include a two-rate structure of 5% and 18%. This will decrease prices for various products and services.
• During the transition period, there may be a mix of products with updated and old mrps in the market.
• ITC’s food division includes items like biscuits, ghee, flavored milk, among others. Revenue from its FMCG business reached nearly ₹22,000 crore during FY 2024-25.
• Malik emphasized that GST reforms could boost consumption ahead of the festive season while enhancing affordability for nutrition-rich value-added products.

Indian Opinion Analysis
The rationalisation of GST rates represents a important policy shift aimed at making essential goods like nutritional food more accessible to consumers by lowering tax burdens. For companies like ITC Limited-which has an extensive portfolio in India’s FMCG market-not only does this enable reduced product pricing but also aligns with broader government objectives to enhance public access to affordable nutrition-focused items through strategic frameworks.

Moreover, reduced product costs ahead of India’s festive season could positively impact consumer spending patterns while perhaps encouraging growth in key sectors such as packaged foods and daily essentials.While short-term disruptions might occur due to dual availability of old and new MRP-based inventory during the transitional phase starting September 22-increased clarity on operational adjustments post-reforms shows readiness by corporations like ITC to maintain seamless distribution amid regulatory changes.

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