GST regime establishes one nation, one tax and one market. In this regard, the Central Government amended Legal Metrology (Packaged Commodity) Rules, 2011 to forbid the companies from selling the same product at different MRP (Maximum Retail Price). Companies who fail to adhere to theprovisions under GST and Legal Metrology will be penalised.
This amendment has revised the definition of“institutional consumer” to prevent the sale of commodities by institutions for their own consumption.
The Central Government has issued transition provisions and post transition provisions for sale of goods and revision in their MRP due to change in the rate of tax. The rate of tax will vary from 5% to 28% depending upon the classification goods, resulting in to change in price of a commodity.
Impact on various Industries:
- The MRP on the pre-packed goods will have to be aligned with the tax rate under GST.
- The expression “best before” and “Use by date” to be printed on the package.
- Maximum retail price to be inclusive of all the applicable taxes.
- Price to be in rupees and paise to be rounded off to the nearest rupee or 50 paise.
- The name of country of origin or manufacture or assembly of the imported product to be mentioned on the package.
- Month and year in which the commodity is manufactured or packed.
- Barcode, GTIN or e-code to be mentioned on the package.
Impact on E-Commerce Industry:
- E-Commerce operators have to adhere to the provisions mentioned in Legal Metrology (Packaged Commodity) Rules, 2011.
- E-Commerce operators will be responsible for accuracy of declaration unless their activity is restricted to provide access to a communication system over which information is made available by the manufacturer or packer or importer.
Impact of cement industry:
- The cement bags below 50Kgs are not required to bear the declarations.
Impact on pharmaceutical Industry:
- Medical devices such as stents, valve, orthopaedic plants, syringe, pharmaceutical drugs and tools for operation shall fall under the ambit of pre-packaged commodity. They will have to adhere to the provisions of Legal Metrology (Packaged Commodity) Rules, 2011.
- The National Pharmaceutical Authority of India has notified drugs prices for 761 drugs as the tax rate has been increased to 12%.
- Health Ministry has withdrawn the bill to amend Drugs and Cosmetics Act. This bill has been withdrawn as a move towards aligning the law with GST provisions.
- The manufactures or packers or importers of pre packed goods have to declare the change in MRP after including the increased amount of tax due to GST for 3 months w.e.f. July 1, 2017 to September 30, 2017. The price can be revised by way of stamping, putting sticker or online printing.
- A sticker with the revised lower MRP (inclusive of all taxes) should be affixed in cases where there is reduction in MRP due to change in the rate of tax. This sticker should not cover the MRP declaration previously made by the manufacturer or the packer on the label of package.
- Use of unexhausted packaging material or wrappers is also allowed up to September 30, 2017 for making necessary correction in MRP.
- Companies can claim credit of goods which will be in transit as on June 30, 2017.