GST, Outsourcing

GST – Notified MRP Rules

There has been a lot of confusion in the minds of the retailers and consumer as to what will be the price of goods immediately after the implementation of GST. Will they pay the Maximum Retail Price printed on the product or the revised price if there is any change in the price of such given product?

As it is not possible to change the packing of every product which shows its price overnight with the implementation of GST. This is also a point of worry for the manufacturers and distributors who hold a large amount of stocks in their storage units.

MRP Rules

The government has addressed all these concerns of the stakeholders and consumers, and notified rules regarding MRP (Maximum Retail Price) on Tuesday, 4th July 2017. This notification clearly states the rules to be followed in case of any changes in the price of the product.

Following MRP rules are specified under the notification:

  • Both old, as well as the new revised MRP, must be shown on the packing of that particular product.
  • If there is any increase in the MRP of any product the manufacturer/ importer/ packer must give a newspaper advertisement in two newspapers about such change in the price of their product. And put a sticker or print the updated MRP on the packaging.
  • On the other hand, if there is any decrease in the MRP of any product no advertisement is required to be published. However, they are required to print or place a sticker on the packaging stating the price of the product.

Extension Period

The government is well aware of the worries of manufacturers and distributors, who have a lot of products lying in their storages. As it will take a long period of time to clear those stocks, the government has provided them with an extension period of three months starting from GST implementation date i.e. 1st July 2017 and ending on 30th September 2017. During this period they are not required to repackage their products stating the revised MRP as packaging also constitutes to a considerable amount of the cost of the product. They can just state the revised prices on their packaging along with the old price of such product. However, this relaxation will not be available after the expiry of this started 3 months period on 30th September 2017.

Legal Action

Now let us discuss what will happen if there is any noncompliance on the part of the manufacturers, packers or suppliers. Food and Consumer Affairs Minister Ram Vilas Paswan tweeted on the evening of 4th of July 2017 that if provisions regarding revised MRP as stated in the rules are not properly followed, then legal action will be taken against such shopkeeper. We can say that proper reflection of changes in the price is mandatory, failing which, dealers will be liable to pay penalty imposed on them by the authorities.

Steps Taken to Ensure Proper Implementation

The government is taking all the necessary steps to make sure that GST implementation is a smooth process. The government has formed a Central Monitoring Committee which is assigned with the task of monitoring price and supply situation post-GST implementation in the economy. This committee is required to meet every Tuesday to for relevant discussions.

Along with this government is taking every step possible to educate the stakeholder as well as the citizens about the GST law. In this process, they are conducting one hour long GST master class for 6 consecutive days which will be broadcasted on Doordarshan and will be available on the net as well.