RULES IMPOSED ON MRP UNDER THE GOODS AND SERVICES TAX
GST-Goods
and Services Tax:
It is a tax
remitted to the government, imposed on the consumers for the products they are
buying. A rate of percentage has been fixed for each division of consumable
products and thereby every businessman should sell their products along with
the cost added according to the percentage fixed as GST and should forward it
to the government as their duty. It is also known as Value Added tax. It
includes sales tax, service tax, excise duty etc. as a part of it. And In India,
GST was implemented on 1st July 2017 by the President of India.
MRP-Maximum
Retail Price:
Maximum
Retail Price is also known as Manufacturer Calculating Price, which will be
printed on every product, and it includes all the taxes imposed on that product.
No seller or retailer can sell their product for the price more than the MRP
since it is the highest price fixed for every single product.
Changes in
MRP due to the implementation of GST:
In India, when
GST came into effect, all the products has faced the change of both increase
and decrease in cost of their product. And
so, it affects the MRP, which leads to unwanted confusions on the sale of
product and also there is a chances of malpractices during the activity of
sale.
Government
revised the rules of MRP according to the changes in price raised due to the presence
of GST.
Rules for
MRP under Goods and Services tax:
- After implementation of GST on 1st July 2017, the manufacturer must give an advertisement in at least two newspapers about the change of price when he found the prices of his product get increased. The rule is applicable only for the products in stock for selling and it is not applicable for the new products coming for sale after 1st July.
- When the manufacturer found the decrease in price of his product, there is no need to provide any advertisement regarding the price changes of the product.
- The advertisement rule is applicable only for 3 months, i.e., from 1st July to 30th September.
- It is must for the manufacturer to put the new price sticker along with the old one of the product without fail, it should be compulsory in both case of increasing and decreasing price of the product.
- The rule of printing both old and new price has been only for the products till 30th September. Only the sticker of revised price is itself enough, need not to mention both the prices in the case of new products.
- The changes in MRP should not exceed the increased tax price of the product, i.e., if the tax for the 50 rupees product is Rs. 2, then the MRP should not exceed the price of Rs. 52.
These were
the rules brought by the government in order to handle the fluctuation of MRP
in accordance of the implementation of GST.
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