Jail term for not printing revised MRP on inventory

Consumer Affairs Minister Ram Vilas Paswan on Friday warned of a fine of up to ~1 lakh and a jail term if the GST rates are not printed on the inventory in the interest of consumers. Manufacturers have been allowed to clear the unsold (pre-GST) stocks by September, with the new MRP. >PILE-UP OF EXPORT GOODS WEIGHS HEAVY ON MODI GOVERNMENT >SUPPLY-CHAIN INTERMEDIARIES NOT READY FOR TRANSPARENCY, ACCOUNTABILITY >AIRLINES, CAB AGGREGATORS GRAPPLE WITH HIGHER LEASE PAYOUTS

The government has warned companies to show the revised maximum retail price (MRP) of their products’ unsold stocks under the goods and services tax (GST) regime.

Consumers Affairs Minister Ram Vilas Paswan on Friday said, in case of non-compliance, defaulters could even face imprisonment of up to a year for breach of the Legal Metrology (Packaged Commodities) Rules. “Non-compliance of this will attract a fine of ~25,000 for a first offence, ~50,000 for a second time and up to ~1 lakh penalty for the third offence onwards and even imprisonment of up to one year,” the minister said. He did not say who in an errant company could be jailed — the tax parlance is “principal person in default”.

Manufacturers have been allowed to clear pre-GST unsold stocks by September 30 with the new MRP. Under the GST regime, Paswan said, some prices of goods have fallen and some have risen. “We have told companies to reprint revised rates on unsold goods. Stickers of the new MRP should be pasted, so that consumers are aware of the change in rates after GST,” he said. The new rates, he added, should be communicated to his ministry and also advertised for better awareness of consumers.

M S Mani of consultancy Deloitte said imprisonment would be a drastic step, as many things go into revising prices, not only taxes. There are also the intensity of competition, how others sees the products in a post-GST scenario, input tax movement and so forth. Also, this could also be looked into by the anti-profiteering body to be set up, he said. “Is there any need for this measure, when an anti-profiteering clause is there?” he asked.

Companies will get input tax credit for pre-GST stocks. If they don’t have receipts of central excise tax, they will get input tax credit in the range of 40-60 per cent on taxes paid, depending on the incidence of GST rates.

The government said it was monitoring the price and supply situation and had deployed 175 senior officers to ensure smooth transition to GST. These officers, of the ranks of joint secretary and additional secretary, have been given charge of four or five districts each to oversee. They are to receive feedback from link officers in the districts on availability of essential commodities and retail price movement. The officers will then report to a central monitoring group, chaired by Cabinet Secretary P K Sinha, and comprising 15 other secretaries who will meet every Tuesday to monitor.

“We are keeping an eye on the prices and supply of essential and daily-use items, in particular,” Revenue Secretary Hasmukh Adhia had said. For full reports, visit www.business-standard.com