MoS Finance: MRP Includes Tax, Customers Must Not Incur Additional GST

Pankaj Singh, the Minister of State in the Ministry of Finance, during a parliament session on Monday, said that there are no additional charges that consumers have to pay on the products that come under Goods and Services Tax (GST), after the MRP.

The minister made the aforementioned statement in reply to a query posed by a Member of Parliament during the gathering. The query inquired about the possibility of retail traders overcharging customers and submitting lower amounts of Goods and Services Tax (GST) to the Government by presenting inflated bills that include GST on the Maximum Retail Price (MRP). In response, the minister asserted that the central tax authority has not yet observed any specific instances of such concerns.

Besides the aforementioned question, other questions were raised regarding whether the government has received any information about individuals cheating customers in the name of GST, whether this unethical practice is prevalent in other parts of the country due to the help of officials and dishonest traders, and if the government possesses any relevant details on the matter.

In response to all these queries, Singh provided a concise answer, stating that ‘no specific cases of such type have been noticed by any Central Tax formation’.

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Furthermore, the response clarified that the Maximum Retail Price (MRP) of a pre-packaged commodity, according to the rules, already covers all applicable taxes, including GST. The Department of Consumer Affairs, through a letter dated 23.12.2019, has advised the Controllers of Legal Metrology in all States/Union Territories to instruct field staff to ensure compliance with the rules.

Another question was raised regarding the actions taken or planned by the government in consultation with many state governments to address the issue and enhance surveillance to prevent such fraudulent activities. In reply, the minister stated that Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011 (as amended) specifies that- “Declarations to be made on every package. – (1) Every package shall bear thereon or on a label securely affixed thereto, a definite, plain, and conspicuous declaration made following the provisions of this chapter as, to the retail sale price of the package shall indicate that it is the maximum retail price inclusive of all taxes and the price in rupees and paise be rounded off to the nearest rupee or 50 paise”.

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These questions addressing extra charges taken from customers by traders were asked by Member of Parliament, Ramdas C. Tadas, in the parliament.