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UNSOLD STOCK OF PRE-PACKAGED COMMODITY | MINISTRY CLARIFICATION


With the advent of GST (Goods & Service Tax) from July 1, 2017, many cases have arisen in which the Retail Sale Price of the Pre-packaged commodity is required to be changed due to the change in the rate of Taxes which may be different from the rates prescribed under the erstwhile tax regime.

In this context, the Honourable Union Minister of Consumer Affairs, Food and Public Distribution, Shri Ram Vilas Paswan has taken a proactive approach and has made the arrangements for the Pre-packaged Commodity Manufacturers or Packers or Importers to handle this situation in a hassle free manner.

Below is the brief of the measures undertaken by the Government of India in this regard:

Increase in Retail Sale Price of the Pre-packaged Commodity
Express permission has been provided to all MANUFACTURERS OR PACKERS OR IMPORTERS to declare the changed Retail Sale Price (MRP) on the unsold stock of manufactured/ packed/ imported Pre-packaged Commodity prior to 1st July, 2017, after inclusion of the increased amount of tax due to GST if any, in addition to the existing Retail Sale Price (MRP), for a period of three months with effect from 1st July 2017 to 30th September, 2017.

Manner of Declaration of Maximum Retail Price (1st July, 2017 till 30th September, 2017)
Retail Sale Price (MRP) shall be declared by way of stamping or putting a sticker or online printing, as the case may be. However, following conditions need to be complied with while adopting the above manner of declaration of MRP:
1.   The difference between the Original Retail Sale Price and the Revised Retail Sale Price (New MRP) shall not exceed the amount of tax implication arising due to change in the tax structure (i.e. migration from old tax regime to GST).
2.   The original MRP shall continue to be displayed and the revised price shall not overwrite on it.
3.   Manufacturers or Packers or Importers shall also publish/inform the abovementioned change in price of the packages in the following manner and to the following authorities:
           a.     at least two advertisements in one or more newspapers
           b.    by circulation of notices to the dealers
           c.     Notice to the Director of Legal Metrology in the Central Government; and
           d.    Notice to the Controllers of Legal Metrology in the States and Union Territories

Manner of Declaration in case of reduction in Retail Sale Price of Pre-Packaged Commodity
Sub-rule (3) of Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011 prescribes the manner of declaration of Retail Sale Price in case of reduction of MRP.
“For reducing the Maximum Retail Price (MRP), a sticker with the 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 or importer, as the case may be, on the label of the package".

Norms for usage of Packaging Material printed before 1st July, 2017
Ministry has clarified that any packaging material or wrapper which could not be exhausted by the Manufacturer or Packer or Importer prior to 1st July, 2017, may be used for packing of material up to 30th September, 2017 or till such date the Packaging material or Wrapper is exhausted, whichever is earlier, after making corrections required in Retail Sale Price (MRP) on account of implementation of G.S.T. by way of stamping or putting sticker or online printing, as the case may be.

It's a welcome step by the Ministry of Consumer Affairs, Food and Public Distribution which will assist the Manufacturers, Packers and Importers in this GST transition phase. 

For detailed analysis and guidance in implementation of the above mentioned changes or in case of any assistance please write to us at:

Compliance Chambers
Advisory & Consulting
F-2/151, Sector 11, Rohini, New Delhi | Pin Code 110085, Nearest Landmark: Fitness Centre Gym 
Mobile: +91 88007 22330, +91 9310048341
Email us at: compliance.chambers@gmail.com
Vist us at: https://compliancechambers.blogspot.in/
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