The Indian Government has sent letters to Fast Moving Consumer Goods (FMCG) companies and industry stakeholders to revise the MRP on existing stocks and must clearly show the difference that there is a reduction in GST rates has made. The metrology division under the department of consumer affairs, which looks out the matter related to labeling and measurement, has informed to companies and industries about the new changes.
The department informed to companies through a letter, “Permission is granted under the legal metrology rules to affix an additional sticker or stamping for a declaration of reduced MRP (maximum retail prices). Earlier labeling of MRP will continue to be visible.”
GST Rates has been reduced by the government nearly on 178 products in last GST Council meeting, consumer affairs Ram Vilas Paswan said that the industries had been permitted to “affix an additional sticker or stamping or online printing for declaring the reduced MRP on the prepackaged commodity”.
The metrology department also said that that the instruction to carry both prices will come into effect by 31st December. By adding that, after the reduction on GST rates new MRP with revised prices must be allowed, the department is providing relaxation that new MRP should be printed directly on the packaging.
Grant Thornton India partner Dhanraj Bhagat, said, “This will empower consumers and make them aware of the benefits being passed on to them.” He further added that “stakeholders need to ensure that stickering is done in a scrupulous manner and leaves no room for misrepresentation.”
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A few days ago, renowned FMCG companies such as Nestle, Dabur, Marico, Godrej Consumer Products has also reduced the prices of their several products. A consumer goods executive said, “It is not possible to paste stickers on products already at retail stores. We will be supplying stickers to distributors to paste them on stocks which have already been produced and reached the distributors — in other words, on already manufactured and unsold inventory.”
A manufacturer of large packaged foods said, “We will comply with the directives and do the needful. We are working closely with our trade partners on pricing.”
Earlier this month, the GST rates have been reduced by the council from 28 percent to 18 percent on several products (FMCG) such as shampoos, deodorant, skin-care products, detergents, and chocolates. Other products were shifted from 18 percent to 12 percent. Soon after the reduction on GST rates, Vanaja Sarna, Chairman of Central Board of Excise and Customs had informed to all FMCG companies must revise the MRP on all products as soon as possible and further communicate to consumers.
The government also said that those companies who are not passing tax reduction benefits to consumers could be penalized with anti-profiteering action. The National Anti-profiteering Authority has been approved by the Cabinet in last week, which looks out the matter that, whether the companies are passing tax reduction benefits to consumers or not.
“This is an important step both as compliance with regulations of the legal metrology Act and its rules as well as towards consumer awareness,” said Tax Solution Provider.
