According to the new notification issued by the government, now, retailers and manufacturers can sell their old inventory as per the new GST prices till September. But several industries, companies, and businesses are upset with this announcement as to why the government has not issued this notification earlier.
M Singh Chief Operating Officer of Videocon said, “If we would have known this earlier, the industry could have planned the transition better. Retailers would not have have been under pressure to liquidate old stock at almost cost price and primary sales from companies to trade would not have declined the way it did in June”. According to the notification issued on Tuesday, If in a case if there is any increase in Maximum Retail Price (MRP) on old inventory, they should have to advertise in two national newspapers, but there is no need in case of new MRP is lower.
The government also stated that the difference between the pre-GST retail prices which are originally written on the package and the revised price ”shall not, in any case, be higher than the extent of increase in tax”. The same provision will be applicable in the case of imposition of fresh taxes.
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Ram Vilas Paswan minister of consumer affairs tweeted ”We have granted relaxation till 30.9.17 to industry under Packaged Commodities Rules to write new MRP on items of reduced prices due to GST”. The minister further added that reduction in prices due to lower tax rates and the benefits should be provided to consumers. Businesses or vendors who did mention revised MRP, the government will take legal action against them.
The Deputy Marketing Manager of Parle Products, B Krishna Rao, said: ”This is basically to curtail potential malpractices by trade and manufacturers who may want to tweak pricing and make the higher profit”. Prateek Jain leader- indirect taxes at PwC said, “MRP may need to be revised in certain cases, especially where the GST rate is now 28%.” He further added that, even after factoring in the 60% deemed credit on the Central GST component allowed on existing stock, there would be a loss of 6-7% at the retail level.
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Jain also said, “This is a welcome relief for the industry. However, while increasing the MRP, it needs to be ensured that benefit of deemed credit is appropriately factored in”. Avinash Srivastava Consumer Affairs secretary said, it is now compulsory to mention the old MRP on unsold inventory along with stickers to mention the revised prices.
Revenue Secretary Hasmukh Adhia said that the new Goods and Service Tax (GST) regime has been implemented in the country and till now there is no single case has arrived. He further added that the government is keeping an eye continuously on prices and the supply situation.
Nearly 200 senior officials of the rank of joint secretary and additional secretary have been allotted to 4-5 each district to review the progress of the implementation of the new regime. Additionally, central monitoring meeting will be held every Tuesday which includes 16 secretaries to keep an eye on prices and stock. Till now nearly 2 Lakh new users have been registered on the GST Network, out of which 39,000 have been already passed.
