Recently someone circulated the following picture on social network showing How McDonald's is not passing benefit of reduced GST to 5%
Domino's is also under investigation by DGS for not passing benefit of reduction in GST.
McDonald's has provided no explanation for increasing the price of items to keep the total same. The counter argument that can be created is GST has been reduced from 18% to 5% but Now the restaurants do not receive any tax input credit. Earlier they used to get 12% tax input credit on GST paid, thus keeping the cost of business for restaurants nearly unchanged.
Domino's has refused to present its side publicly saying - "We are in a silent period now, we would not be (able) to participate in any story." (Diplomatic speak for Let the story get buried in a few days with a wall of silence.)
McDonald's is not being shy of giving an impression that GST reduction gives them more value
I visited a McDonald's restaurant and found the following displayed prominently at cashier register
Is it that McDonald's is not passing benefit of GST on regular food but passing the benefit for Maharaja Mac?
The final losers on this wizardry of increasing taxes and then claiming to reduce taxes is the customer because with introduction of higher taxes, the food product prices was increased. Firms won't happily pass on complete benefit reduction in taxes (if any) to customer.
Student of economics understand this stickiness of prices. Apparently Finance Minister of this country doesn't. He raises taxes then does a roll back under public pressure forgetting the fact that prices won't come down immediately, firms will keep the increased revenue causing loss to consumer and inefficiency in market.
Source: https://economictimes.indiatimes.com/industry/cons-products/food/profiteering-notice-to-jubilant-foodworks-on-dominos-pizza-pricing/articleshow/63594627.cms
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