Consumer Affairs Department eases compliance norms to ensure smooth GST cut rollout

In a major relief to industry, the Department of Consumer Affairs has allowed companies to continue using existing Maximum Retail Price (MRP), labelling and packaging until end of the year December 31, even though the upcoming goods and services tax (GST) rate cuts will take effect from September 22.

The GST regime, as part of a rationalisation exercise, has been reduced from 4 slabs and other cesses to two primary slabs: the 5% and 18% slabs. The system that will kick in from September 22 will also have a 40% tax on sin goods, i.e., cigarettes and other tobacco products, and luxury items, including some cars.

Issuing a circular under the Legal Metrology Act, the Ministry said the relaxation is aimed at ensuring a smooth transition while protecting consumer interest. While companies can sell stock with old MRPs, they are mandated to pass on the benefit of lower GST rates by reducing the actual selling price.

To ensure transparency, companies will be required to publicise the revised prices through newspaper advertisements, as well as issue notices to dealers, distributors, and the Legal Metrology Department.

Officials said the move strikes a balance between easing compliance for businesses and ensuring that consumers fully benefit from the GST rate reductions.

Also read: After Tata Motors, Mahindra says it will cut prices on its vehicles after GST reforms