Revised MRP stickers on pre-July stocks allowed till Sep 30: Paswan
Pasting stickers with revised prices on pre-July stock will not amount to a breach of rules, the government said on Friday, offering relief to companies that had been worried about what do with products predating the Goods and Services Tax (GST) that kicked in on July 1.
Consumer affairs, food and public distribution minister Ram Vilas Paswan said the decision had been communicated to all chief ministers. He urged them to set up helplines to address consumer grievances during the transition to GST.
“The sticker mentioning revised price shall not overwrite the original MRP (maximum retail price),” Paswan said, adding that stickers would be allowed until September 30.
Goods sold after that date have to carry prices with GST on packages. To ensure that companies and retailers have a way of dealing with older (so-called preGST) stock, and prevent profiteering, the government last week announced guidelines allowing companies to print, stamp, or use stickers to show the new MRP on a package.
Packaged consumer goods companies had been worried that they will be violating the rules of the Legal Metrology Organisation, a department that oversees weights, measures, and price displays on packs. According to these, stickers aren’t allowed on top of the MRP and tampering with MRP is an offence.
“Stickers with revised prices will not breach any law. Busi- and traders have to pass on all benefits to consumers,” said Paswan.
Any default in revising prices in line with reduction in tax will attract a fine of ₹10,000, explained an official who asked not to be named. According to a report by PTI, non-compliance with printing the revised price will attract imprisonment of up to 1 year .
“For products that are in the shelves in the millions of outlets across India, stickering them will be logistically challenging, very time-consuming and expensive,” said Vivek Gambhir, managing director and chief executive officer, Godrej Consumer products Ltd.
“Stickering does not really solve anything as market economics will ensure equilibrium in pricing,” once products that have revised lower prices hit the shelves, Gambir added.
The ministry also revised the Legal Metrology (Packaged Commodities) Rules, 2011 mandating companies to increase the text size of words and numbers mentioning maximum retail price, net quantity and consumer care details.
Revenue Secretary Hasmukh Adhia on Friday appealed to all businesses to paste stickers with revised prices on packages of pre-GST stock. “It is not very difficult. If you are a company with a large amount of pre-GST stock, at least publish the revised price in two newspapers and start putting stickers as early as possible,” said Adhia.
Friday’s clarification may not solve the problem of packaged consumer goods companies.
“Our understanding is that if there is unsold inventory of preGST regime then companies have to put stickers on these goods for any price revisions. Also if the prices are taken up, then in addition to putting stickers they have to also advertise in two newspapers,” said Vivek Karve, chief financial officer, Marico Ltd. “However the use of stickers is cumbersome...as we sell millions of packs per month and these reach millions of stores,” he added.