The government has given clear instructions to consumer goods companies that new price labels on existing stocks should clearly display the price difference which is caused as a result of the recent reduction in GST. The metrology department which supervises the issues pertaining to measurement and labelling has told companies to incorporate the changes. "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.
Almost immediately after the declaration of reduction of GST rates on more than 178 products last week, the minister of consumer affairs Ram Vilas Paswan stated that companies had been permitted to "affix an additional sticker or stamping or online printing for declaring the reduced MRP on the pre-packaged commodity".
"This will empower consumers and make them aware of the benefits being passed on to them. But stakeholders need to ensure that stickering is done in a scrupulous manner and leaves no room for misrepresentation,” said Grant Thornton India partner Dhanraj Bhagat.
Companies which have taken the action to reduce prices include Nestle, ITC, Marico, Dabur and Godrej Consumer Products. "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.
We will comply with the directives and do the needful. We are working closely with our trade partners on pricing,” said a packaged food maker.
The government has been stern in its action and has stated openly that those firms who aren’t passing on the benefits to end consumers will end up attracting anti-profiteering charges. The cabinet recently sanctioned the creation of the National Anti-profiteering Authority, which will be responsible to ensure that the welfares of GST, where applicable, are passed on to consumers.