After GST rollout, dual MRP tags to help clear inventories, say FMCG firms

Tags indicating pre and post GST rates would help in bringing transparency to the market

Dual MRP tags – indicating pre and post GST rates — on unsold consumer products will help companies clear inventories and bring transparency to the market, FMCG firms said on Wednesday.

Besides, the tags would enable end-consumers understand GST's impact and how the prices have gone up or down.

Yesterday, the government has allowed unsold pre-packed items to be marketed to consumers with an add-on sticker indicating the revised price for three months.

"This relaxation is in the favour of smooth transaction of the GST. It would clear the confusion amongst the trader and the manufacturing community over MRP," a Patanjali spokesperson told PTI.

The old MRP will have to be clearly displayed along with the revised MRP sticker. But from October 1, all pre-packed goods will have just one MRP, with GST.

"This would also bring transparency as the consumer must know the after-effects of the GST, whether the prices got reduced or went up. They can analyse it and compare it," the spokesperson added.

Hindustan Unilever said it has already started dispatching products with the revised prices.

"HUL manages its inventories tightly and hence we do not intend to avail the relaxation provided by the government to affix a sticker on unsold stocks as of June 30, 2017 to communicate price changes due to GST, if any," said a HUL spokesperson.

Dabur India is also evaluating the recent directive and plans to come up with the revised prices along with the pre- GST rates.

"We are evaluating it and will take appropriate action, as per law," said Dabur India Chief Financial Officer Lalit Malik when asked about company's plans on selling inventories in the next three months.

While Emami Ltd and P&G denied to comment, Godrej Consumer could not be reached for comment.

While prices of few FMCG products have come significantly down under the new GST regime, a few other products have become dearer.

The GST Council has put daily use goods as bathing soap, hair oil, detergent powder, soap, tissue papers and napkins under 18 per cent tax slab, while detergents and fizzy beverages like coke and Pepsi are placed under 28 per cent tax bracket.