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Old stocks too must show post-GST price, companies warned

08 July 2017

The government on Friday warned manufacturers, importers and sellers of pre-packaged goods to post prevised maximum retail prices on their unsold stocks inclusive of the new Goods and Services Tax or face penalties.

Consumer affairs minister Ram Vilas Paswan said on Friday failure to do this could lead to a penalty of up to a year in jail for breach of the Legal Metrology (Packaged Commodities) Rules.

The punishment ranges from fines of up to Rs1 lakh to prison terms of up to a year for repeat offence of not printing the post-GST rates on product labels. The consumer affairs ministry has come out with new norms for affixing the revised maximum retail price (MRP) on old stocks, which were manufactured and packed before 1 July.

As per the Legal Metrology Act, the first such offence may attract fine up to Rs25,000 and for second offence the fine may be up to Rs50,000.

The state governments are empowered to enforce this. Consumer affairs ministry sources said the direction for pasting additional stickers on unsold packaged items has been issued as per the provisions in the law. However, officials admitted that they can't recall a single case where a manufacturer, importer or seller has been sent to jail for such offence.

He did not share as to who in an errant company could be jailed - the wording of the order is 'principal person in default'.

The warning came a couple of days after some large companies had reportedly claimed that printing or stamping any price other than the MRP on packets is illegal, and also that this is going to be a logistical nightmare since they have huge inventory.

Under the GST regime, Paswan said, some prices of goods have fallen and some have risen. "We have told companies to reprint revised rates on unsold goods. Stickers of the new MRP should be pasted on products so that consumers are aware of the change in rates after GST," he said. The new rates, he added, should be communicated to his ministry and also advertised for better awareness of consumers.

"We don't want inspector raj, but they must follow what is legally correct. The companies are not going to release all the unsold items in one go. They can put the new prices in batches and that's why we have given time till 30 September to exhaust their stocks. After 30 September, no one will be allowed to sell pre-packaged items with two MRPs. The industry must understand that we have issued the direction for the benefit of consumers. They need to inform consumers how much less or more they are paying," Paswan said.

The consumer affairs ministry has also set up a committee to address consumer grievances on GST. The National Consumer Helpline is also addressing the concerns of consumers regarding GST. Paswan said more than 700 queries have been received by the consumer helplines.

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