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In relief to retailers, govt allows sale of pre-GST stock with new price stickers till Sept 30

A revised MRP will be displayed along with printed sale price till September 30
PTI New Delhi July 05, 2017 13:30 IST

The mega discounts retailers were offering in order to liquidate unsold inventory of products manufactured prior to the rollout of the Goods and Services Tax may now come to an end. In a relief for retailers, the government has allowed manufacturers and retailers to stamp new prices on their pre-GST stock and sell them till September-end this year. A notification to this effect was issued by the Ministry of Consumer Affairs, Food and Public Distribution on Tuesday.

As per the new rules, companies have till September 30 to clear unsold pre-GST goods as the government today allowed a revised MRP to be displayed along with printed sale price to reflect the changes post the new tax regime kicking in. MRP or Maximum Retail Price, as per law, is the highest price that can be charged to a consumer after including all taxes. But in case of some commodities, the tax rate has changed post Goods and Services Tax (GST), altering the MRP. 

This created a problem for several businesses which were left with large volumes of unsold pre-packed items when the GST came into force from July 1. A government notification has now allowed such unsold pre-packed items to be marketed to consumers with an add-on sticker indicating the revised price. The old MRP will have to be clearly on display along with the revised MRP sticker. 

But from October 1, all pre-packed goods will have to have just one MRP including the GST. Food and Consumer Affairs Minister Ram Vilas Paswan warned of legal action against manufacturers for not printing the revised MRP post rollout of the GST. 

"Fall in prices due to lower GST should be passed on to consumers. ...The government will take legal action against vendors not declaring revised MRP after GST," Paswan said. 

The old MRP will have to be necessarily displayed on the unsold inventories and the new rates can be reflected by way of stickers or through online printing alongside, Consumer Affairs Secretary Avinash Srivastava told reporters here. 

On items where the price has to be increased for unsold stocks, the manufacturer or packer or importer will have to give at least two advertisements in two or more newspapers informing people about the change. 

"The central government, hereby, permits the manufacturer or packer or importer of pre-packaged commodities to declare the changed retail sale price (MRP) for three months from July 1-September 30. Declaration of the changed MRP shall be made by way of stamping or putting sticker or online printing," a government notification said. 

The difference between the retail sale price originally printed on the package and the revised price "shall not, in any case, be higher than the extent of increase in tax" or in the case of imposition of fresh tax on account of the implementation of the GST, it said. 

"The original MRP shall continue to be displayed and the revised price shall not overwrite on it," the notification said. 

For reducing the MRP, a sticker of revised lower MRP (inclusive of all taxes) may be affixed and the same shall not cover the MRP declaration made by the manufacturer or the packer on the label of the package. 

The notification also said that the packaging material or wrapper which could not be exhausted prior to July 1 may be used for packing of material till September 30, 2017. 

This will be permissible after the manufacturer or importer or packer makes correction in the retail sale price on account of the GST implementation by way of stamping or putting sticker or online printing.