Lucknow, Sept. 23 -- The authorities in Uttar Pradesh may face a major test as they gear up to ensure that the Goods and Services Tax (GST) rate cuts actually reach consumers as the new rates come into effect across the country from Monday. While the Centre has simplified slabs and reduced tax on several items, enforcement at the state level may prove difficult as disputes are likely between retailers and customers. Across the country, FMCG majors have announced they will pass on the full benefit, and apparel and footwear prices under Rs 2,500 are already seeing adjustments, though often by trimming discounts rather than lowering sticker prices. GST authorities in some states have even launched undercover checks to verify compliance. Officials in Uttar Pradesh point out that consumers often presume that, for example, if the GST rate on a commodity is reduced from 18% to 4%, the price will automatically fall by 14 percentage points. "But that is not the case. For example, if the base price of an item is Rs 100, with 18% GST, the cost is Rs 118. With 4% GST, it becomes Rs 104, a fall of only Rs 14, which is about 11.9% of the original price, not 14%. Since transport, dealer margins and other costs are also factored in, the actual reduction at the consumer end can be even smaller," a senior state tax department official explained. The mismatch in expectations, he said, could trigger disputes between retailers and customers. Bharat Singh, a retired additional commissioner, state tax, said much would depend whether the dealers honestly want to pass on the benefits to consumers or not. Many companies, he said, often played tricks, like increasing the base price in the name of increased production cost, shrinking the size of the pack to deprive consumers of the net benefit of a cut in the tax rate. "For example. the government has done away with the 18% GST on premium of health policies and this should give relief to customers but the insurance companies are already making excuses," Singh said. State tax commissioner Nitin Kumar Bansal said the department was aware of the initial complications and was prepared to deal with the same. "Our field officials are regularly holding meetings with trader bodies across the state, educating them, assuring them of resolving their issues arising from the revision of GST rates but asking them to ensure the benefits are necessarily passed on to customers," he said. To address such challenges, Bansal said the Union consumer affairs ministry had allowed manufacturers, packers and importers of pre-packaged commodities to declare revised retail sale prices (MRPs) on unsold stock after GST rate changes. Revised MRPs can be displayed through stamping, stickers or online printing on existing packaging until December 31, 2025, or till stocks last-provided the original MRP remains visible and is not overwritten. The ministry has further clarified that the difference between the old and new MRPs must reflect only the exact impact of GST revision. In case of a tax reduction, the revised MRP must show the same extent of reduction. Retailers argue they cannot cut prices instantly, as old stock was procured at higher tax rates. Adardh Vyapar Mandal president Sanjay Gupta said, "Traders will try their best to smoothly pass on benefits to consumers. But traders will face procedural difficulties. For example, traders who purchased goods on a higher GST rate, will face difficulties in claiming the Input Tax Credit on their old stocks." In the meantime, the UP government on Sunday issued a series of notifications in the light of the GST Council's decision on compressing GST slabs and reducing GST rates for several commodities. The government is also launching a week-long"GST Reform Awareness Campaign," from September 22 to 29. The initiative seeks to take the benefits of the Centre's new GST reforms directly to traders and customers while also promoting indigenous products during the festive season....