MRP after input-output tax credit

Product labels to declare changed MRPs


The Ministry of Consumer Affairs, Food and Public Distribution issued a clarification on change in the maximum retail price (MRP) of food product labels. It stated that the changed MRP on the label should be calculated considering the input and output tax credit under the Goods and Services Tax (GST). Products with declaration on labels will be allowed in the retail space till 30 September 2017.

The statement issued states, “It is clarified to all concerned that in the circular WM-10(31)/2017, dated July 4, 2017, the phrase ‘the increased amount of tax due to GST, if any’ means, ‘the effective increase in the tax liability calculated after taking into consideration extra availability of input tax credit under GST including the deemed credit available to the traders under Central GST (CGST).”

Thus, the declaration of new MRP on unsold stock manufactured/packed/imported prior to 1 July 2017 should be done after taking the extra availability of input tax credit under GST into consideration (including deemed credit available to traders under proviso to Sub-section (3) of Section 140 of the CGST Act, 2017).

Ram Vilas Paswan, minister of consumer affairs, food and public distribution, clarified , “In this context, we have allowed the manufacturers/packers/importers of pre-packaged commodities to declare the changed retail sale price on unsold stock manufactured / packed / imported prior to 1 July 2017 after the inclusion of GST, if any, in addition to the existing retail sale price, for three months (1 July 2017 to 30 September 2017).”

One should also be aware that while declaring the changed MRP, the old MRP should also be visible on the label and the declaration can be made either by stamping, pasting a sticker or online printing. The Department of Consumer Affairs asked to change MRPs post implementation of GST as the retail sale price of a pre-packaged commodity might have to be changed.

Nilesh Lele, secretary, Association of Food Scientists and Technologists of India (AFSTI), stated, “Those products whose price shoot post GST calculation can avail the necessary changes through the methods stated by the ministry. In order to sell these products in the retail market, one has to alter their MRP accordingly. Small players stand a chance to benefit from this.”

He concluded saying, “In the past three years, there have been several changes and alterations to labelling norms of food products. They come from legal metrology department, the Food Safety and Standards Authority of India (FSSAI) and the Ministry of Consumer Affairs. It is challenging to comply with the changing norms but almost all established players are confirming and complying with them.

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