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PROPAGANDA AND PROFITEERING: MEDIA MISREPRESENTATION OF GST RATE CUTS AND THE POLITICAL WAR ON CONSUMER TRUTH

Jayaprakash Gopinathan
Media claims of profiteering after GST rate cuts misunderstood Section 171(1): unchanged retail prices may lawfully reflect pre-cut inventory Following GST rate rationalisation and a cess-credit sunset, regional media circulated unchanged retail bills to allege profiteering. Legally, Section 171(1) requires passing on benefits only when a registered person actually obtains a tax-rate reduction or increased ITC; pre-rate-change inventory purchased under the earlier regime embeds prior tax and is excluded from profiteering calculations under DGAP base-price methodology and applicable rules. Media assertions that unchanged post-cut bills automatically violate anti-profiteering law misstate the statutory scheme and may amount to public mischief or breaches of journalistic norms. Regulatory clarification and stakeholder guidance from tax authorities and press regulators are appropriate remedies. (AI Summary)

I. Introduction — The Collusion of Narrative and Numbers

Since the announcement of GST rate rationalisation and the scheduled 22 September 2025 cess-credit sunset, several Kerala-based television channels and digital platforms have begun circulating sensational videos comparing identical retail bills before and after that date. The purported inference is that the Modi Government’s rate reduction “did not reach the consumer.”

Such presentations are neither innocent nor economically sound. They reveal a pattern of collusion between partisan anchors and anti-reform commentators determined to discredit GST 2.0 even before its implementation. The channels project static prices as proof of profiteering, when in fact the continuity of price is the natural and legitimate result of transitional inventory dynamics recognised by law itself.

II. The Legal Reality — Transitional Stock Cannot Reflect Immediate Price Change

Under Section 171(1) of the CGST Act, the obligation to pass on benefits arises only when a registered person actually obtains a benefit from a reduction in tax rate or increase in ITC. A trader who purchased goods before 22 September 2025 at the higher tax rate, availed ITC thereon, and sells them after that date, has derived no new benefit. His cost structure continues to embed the earlier tax. The manufacturers who had adopted new MRP on goods delivered after 22.09.2025 are silent about stocks cleared prior to 22.09.2025. But the retailers have to retrieve their money.

The statutory mechanism recognises this through the DGAP’s base-price methodology and by excluding pre-rate-change stock from profiteering computation. Therefore, a shopkeeper issuing the same bill on 23 September as on 21 September is not defrauding consumers; he is merely recovering the cost already incurred under the previous rate regime.

The media’s insinuation that such behaviour “violates anti-profiteering law” betrays either ignorance or wilful distortion of the GST framework.

III. Manufacturing Mistrust — The Misuse of Anti-Profiteering Narrative

By flashing screenshots of unaltered bills and declaring that “prices remain unchanged despite tax cuts,” certain media outlets have converted a technical fiscal transition into a political weapon. None of these entities are statutory authorities under Section 171(2) or Rules 122–137. Yet they issue pronouncements amounting to quasi-judicial verdicts.

Such conduct borders on public mischief under Section 505 IPC and violates the Press Council’s Norms of Journalistic Conduct, which require accuracy, context, and respect for pending investigations. When channels omit the legal explanation that transitional stock is exempt from benefit-passing, they are not informing the citizen but inciting resentment against fiscal reform.

IV. Political Collusion and Media Ethics

The orchestration is evident: coordinated visuals aired across multiple channels, expert panels filled with habitual government critics, and social-media amplification by partisan handles. The narrative serves one purpose — to portray GST rationalisation as a hoax.

Ironically, many of these outlets once demanded rate cuts to relieve inflation. When the Government delivered, the same voices reversed stance, accusing traders of profiteering. Such duplicity exposes the political economy of outrage, not the economics of taxation.

Media houses, by assuming the role of investigators, undermine the due process reserved for the Competition Commission and the DGAP. This constitutes a direct assault on institutional integrity.

V. Corrective Measures and Public Accountability

To arrest this misinformation cycle, the following steps merit consideration:

  1. The Press Information Bureau (PIB) or MIB’s Fact-Check Unit should promptly rebut false visuals and explain transitional-stock principles in lay terms.
  2. The Competition Commission of India / DGAP may issue an official clarification outlining that no profiteering arises on pre-rate-change inventory.
  3. State GST Departments should brief trade associations and chambers to educate retailers on proper documentation of pre-22 September stock.
  4. Persistent offenders in media should be referred to the Press Council of India or the News Broadcasting Standards Authority for violating accuracy norms.

Public discourse must distinguish between genuine consumer grievance and orchestrated political propaganda.

VI. Conclusion — Journalism or Judicial Overreach?

When television studios transform into tribunals and hashtags replace hearing notices, democracy loses both truth and temperament. Anti-profiteering enforcement is a matter of law, not ideology.

The national broadcasters that maintain professional distance from politics have, in fact, shown remarkable restraint in not sensationalising transitional pricing. The distortion arises from a network of left-liberal anchors and commentators who dominate Kerala’s electronic and digital media and have converted legitimate fiscal administration into political theatre. By exhibiting unchanged retail bills after 22 September 2025 and proclaiming that “Modi’s rate cut failed,” these channels are not investigating truth — they are orchestrating mistrust. Their selective coverage, partisan framing, and disregard of statutory facts under Section 171 and Rule 126 reduce journalism to an act of organised misinformation.

Such interference from ideologically motivated editorial groups corrodes both consumer confidence and institutional credibility. It suppresses the legitimate explanation that traders selling pre-rate-change stock cannot instantly cut prices, and instead inflames public resentment against GST itself. The consequence is civic confusion and economic demoralisation.

Kerala’s media owes its viewers candour: an unchanged bill post-22 September 2025 often reflects lawful compliance, not profiteering. Journalism that hides this truth under ideological hostility is not watchdog journalism but propaganda in robe. The time has come for professional journalism in Kerala to rise above faction, respect economic logic, and restore the constitutional sanctity of an informed and responsible press.

Reform is a national endeavour — not a newsroom drama.

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