The government has allowed manufacturers, packers, and importers to revise MRPs on unsold stocks following GST rate changes.
The move responds to retailer and industry pleas about inventory carrying outdated pricing and grammage.
Trade bodies warned that absorbing taxes under revised rates could lead to heavy losses for their members.
Govt Allows Companies to Revise MRP on Unsold Stocks After GST Changes
This follows representations by retailers and industry associations earlier this month, flagging two to three months of inventory carrying old pricing and grammage across the supply chain
Summary
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The central government on Tuesday allowed manufacturers, packers, and importers of packaged goods to revise the maximum retail price (MRP) on unsold stocks in line with changes in goods and services tax (GST) rates. This follows representations by retailers and industry associations earlier this month, flagging two to three months of inventory carrying old pricing and grammage across the supply chain.
Submissions by the Retailers Association of India and the Clothing Manufacturers Association of India reportedly argued that their members would be unable to absorb the higher tax under some of the revised rates, which might lead to heavy losses.
In a notification on September 9, the Department of Consumer Affairs said, “The central government hereby permits the manufacturers, packers, or importers of pre-packaged commodities to declare the revised retail sale price (MRP) on unsold stock manufactured, packed, or imported prior to the revision of GST, after including the applicable/increased amount of tax or after reducing the reduced amount of tax due to the change in GST, if any, in addition to the existing retail sale price (MRP), up to December 31, 2025, or until such stock is exhausted, whichever is earlier.”
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Manufacturers, packers, and importers can revise the MRP by stamping, putting stickers, or online printing, provided the original MRP remains visible and the revised price reflects only the tax increase or decrease.
However, this exemption comes with certain conditions. Companies must advertise the price change in at least two newspapers, notify dealers and legal metrology authorities, and may use old packaging materials with corrected MRPs until December 31, 2025, or until existing stock is used up, whichever comes earlier.
Business Standard, in a report citing industry executives, said the deadline gives companies adequate time to avoid destroying packaging material. However, the challenge now lies in tracking stocks across the supply chain and updating prices, which will require dedicated manpower.
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