Legal Metrology Update: Permission to Revise MRP on Unsold Food Products after GST Rate Changes

Recently, following revisions in GST rates, India’s Department of Consumer Affairs issued a permission/order allowing manufacturers, packers, importers of pre-packaged commodities (which includes many food products) to revise the Maximum Retail Price (MRP) on their unsold stock.

Here are the main points of the update:

1. Applicability
   The rule applies to unsold stock of pre-packaged goods manufactured or imported before the GST rate change.
2. How to revise the MRP
   Manufacturers / packers / importers may revise the MRP by:
   • Stamping the package
   • Affixing a sticker
   • Online printing (if feasible)

But with conditions:

• Original MRP must continue to be visible (i.e. the revised MRP via sticker etc. should not obscure or overwrite the original printed MRP).
• The change in price (increase or decrease) should correspond only to the change in tax (GST) and should not exceed the difference caused by GST revision.

Communication / Notification requirements
To make such revisions valid / legally safe, there are formalities:

• At least two advertisements in one or more newspapers.
• Circulate notices to dealers

• Inform the Director of Legal Metrology (Central) and Controllers of Legal Metrology (States/UTs).

Validity / Time-period

• This permission is valid until 31 December 2025, or until the existing (unsold) stock is exhausted, whichever is earlier.
• Also, packaging materials / wrappers already printed (before the GST change) can continue to be used till 31 Dec 2025 or until they get exhausted, after making necessary corrections to MRP.

Why this change?

Here are the main reasons and legal context for why this update was made:

1. GST Rate Changes (GST 2.0)
   The government has revised GST slabs or rates on certain goods. As GST is a component of MRP (by law, MRP on pre-packaged goods must include all taxes) under the Legal Metrology (Packaged Commodities) Rules, when GST changes, theoretically the MRP should also change
2. Avoid loss / disruption for manufacturers / retailers
   If GST goes up, but stock had been manufactured/printed with old MRPs (inclusive of old GST), there is a mismatch; either the product is underpriced relative to the new tax burden, or products may need to be discarded or repackaged. This is burdensome. The permission helps reduce waste, avoid losses, facilitate continuity in supply.
3. Consumer protection
   Since MRP must include taxes, consumers should not be burdened unfairly by goods still showing old MRPs when tax increases have been passed. Also, if taxes decrease, consumers should get lower prices. The legal metrology rules ensure uniformity, transparency. This update enables correction in prices in line with tax changes, while preserving consumer rights.
4. Legal / regulatory certainty
   Implementing changes in price declarations needs legal backing so there is clarity in liability and compliance. Manufacturers needed relief under the law to do re-stickering / stamping etc. without being penalised under Legal Metrology Act / Rules. This permission grants that space, under conditions.
5. Ease of Doing Business
   Allowing time, transitional permissions and not forcing immediate discarding of packaging materials etc., helps businesses manage the transition when tax rates change. It reduces logistical, financial stress.

Implications / Things to watch out for

• Businesses need to ensure they comply with the notification and advertisement / notice / visibility conditions; failing that could invite penalties under Legal Metrology rules.
• Dealers, retailers must not sell goods above the revised MRP once it is communicated properly.
• Consumers should check for both the original MRP and revised MRP sticker / marking, to ensure fair charges.
• Timelines: after 31 December 2025 (or stock exhaustion), no more use of old printed MRPs unless they comply fully.

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