New Delhi : The government has told consumer goods firms and industry stakeholders that new price tags on existing stocks in the trade pipeline should clearly show the difference that the recent cut in GST has made. The metrology division under the department of consumer affairs, which oversees matters related to measurement and labelling, has instructed the companies to this effect.
“Permission is granted under the legal metrology rules to affix an additional sticker or stamping for declaration of reduced MRPs (maximum retail prices). Earlier labelling of MRP will continue to be visible,” it said in a November 16 letter that media has seen.
Soon after the GST cut on 178 products last week, consumer affairs minister Ram Vilas Paswan said firms had been allowed to “affix an additional sticker or stamping or online printing for declaring the reduced MRP on the prepackaged commodity”.
The metrology division said the order on carrying both prices will be applicable till December 31. It has allowed the new MRP to be printed on stickers following the cut in GST, relaxing the rule that it has to be printed directly on the packaging.
“This will empower consumers and make them aware of the benefits being passed on to them,” said Grant Thornton India partner Dhanraj Bhagat. “But stakeholders need to ensure that stickering is done in a scrupulous manner and leaves no room for misrepresentation.”
Cos Announce Price Cuts
Nestle, ITC, Dabur, Godrej Consumer Products and Marico are among the companies that have announced price cuts over the past three days. “It is not possible to paste stickers on products already at retail stores. We will be supplying stickers to distributors to paste them on stocks which have already been produced and reached the distributors — in other words, on already manufactured and unsold inventory,” said a consumer goods executive.
A large packaged foods maker said: “We will comply with the directives and do the needful. We are working closely with our trade partners on pricing.”
On November 10, the GST Council moved several products of mass consumption to the 18% slab from 28%, including detergents, shampoo, skin-care products, chocolates and deodorants. Other goods were moved to the 12% slab from 18%. Following the reduction, Central Board of Excise and Customs (CBEC) chairperson Vanaja Sarna wrote to FMCG companies asking them to immediately revise prices on all products and communicate this to consumers.
The government has said companies not passing on benefits could attract anti-profiteering action. The cabinet last week approved the creation of the National Anti-profiteering Authority, which will be tasked with ensuring that the benefits of GST, where applicable, are passed on to consumers.
Source : ET