MUMBAI | NEW DELHI: Prices for most groceries, household and personal care products will remain unchanged for at least six to eight weeks after the goods and services tax is put in place on July 1 as companies aren't too sure how the new levy will impact their cost of operations.Several products including cookies, toothpastes, soaps and hair oils will be taxed at 18% under GST compared with about 22% in the current indirect tax structure of excise duty and value-added tax. However, detergents, shampoos and skincare products will attract a higher 28% levy."While our intent is to pass on the benefits of lower GST in the relevant categories where rates are coming down to consumers as soon as it is feasible, there are still some open issues where we need clarity such as how area-based exemptions will be handled, that will impact pricing decisions," said Godrej Consumer managing director Vivek Gambhir. No price increases are planned in categories where GST rates will be going up, he said.Retailers and distributors suggest that products of Hindustan Unilever, Marico, Dabur, Colgate, Procter & Gamble and Britannia will carry the same price tags until August."There are hardly any changes in either price or grammage for the new stock that will hit the market from next week onwards," said an HUL distributor who didn't want to be named. As a policy, HUL doesn't comment on price changes.In the run-up to GST, several companies and retailers have been either halting supplies or plan to bill limited stocks in the last few days of the month, a period when companies typically push more products and primary shipments to meet quarterly sales targets.While GST legislation includes an anti-profiteering clause requiring companies to pass on the benefits of lower taxes to consumers, companies say they have to gauge the impact of input tax credit, if any, on raw materials."We can't change price points such as Rs 5 and Rs 10. The only option would be to reduce or increase weight, but it won’t be based on just GST on final products," said Mayank Shah, group product manager at Parle Products. "We need one-two months to see if the new tax has any impact on the cost of products and what will be the credit on input to offset them."Companies want to avoid knee-jerk reactions although many have factories in excise-free zones and clarity is awaited on the application of GST to goods made there."Most companies want to avoid the confusion of having two price tags for the same product with different pre-and post-GST rates,” said another distributor with multiple clients. "While companies have agreed to compensate for any loss of margins due to the difference, there will be unnecessary paperwork." Bisleri said altering prices by Rs 1-2 doesn't really work for the consumer."A minimum price change of Rs 5 in a category like ours is what will benefit the consumer. So, we are waiting for GST issues to settle down first before deciding on pricing changes," said Bisleri chairman Ramesh Chauhan. "We will observe market and trade dynamics for at least a month or two before taking any calls on pricing changes."With the country's largest consumer segment — milk and curd — exempted from the new tax, market leader Amul said milk prices would remain unchanged. "We will drop prices of milk powder and baby food by close to 5%," said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the Amul brand. "But the new pricing will reach consumers only after a week or 10 days once the existing inventory gets exhausted."Despite the tussle between large consumer companies and organised trade over margins last week, Future Group, the country's largest retailer, said it will launch the GST Mahurat Shopping at midnight as July 1 starts."We are dropping prices 2-22% across categories and will offer additional bonus or cashback for customers," said Kishore Biyani, chief executive of Future Group, which runs the Big Bazaar EasyDay and Nilgiris supermarket chains. "We have bargained deals from FMCG (fast-moving consumer goods) companies and will pass the entire benefit to end customers. This will be a huge consumer event." Coca-Cola India said on Tuesday it will increase prices of its aerated beverages and drop prices of packaged drinking water brand Kinley, adding that was still evaluating the extent of the hike and when it will implement the new pricing. The company said aerated beverages will be worst hit with a proposed tax rate of 40% under GST, significantly higher than the current weighted average national tax incidence."The company has no choice but to minimally increase the prices even after absorbing the significant portion of the tax increase," Coca-Cola India said in a release. "We will pass on the taxation benefits to the consumers and make all attempts to absorb the maximum impact of the escalation of tax in some categories of our beverage portfolio," Coca-Cola India and southwest Asia business unit president T Krishnakumar said.