FMCG firms may shift to new GST regime without changing current price tag

The govt could allow discounts to be reflected in the invoice during the transition

In what could be a relief for fast-moving consumer goods (FMCG) companies, the government may not insist on stickers to exhibit the new prices during the transition to the new goods and services tax rate (GST). The new GST rates are applicable from September 22. 

According to sources in the know, the government is unlikely to make new price tags mandatory for goods in the inventory till FMCG companies manage to get new packs into the market.  

On September 9, the Centre permitted manufacturers, packers, and importers of pre-packaged commodities to revise the maximum retail price (MRP) of unsold stock through stickers following the recent changes in the GST rates.

The government announced the reduction in GST rates across a host of consumer products which include shampoos, toothpaste, soaps, food items among others. 

According to a notification issued by the Department of Consumer Affairs on  September 9, companies can declare the revised MRP until December 31, 2025, or until the old stock is cleared, whichever is earlier.  

 

Declaration of changed MRP shall be made by way of stamping or putting sticker or online printing as the case may be.  

Business Standard could not independently verify with the government if these new guidelines will be notified soon.  

A source said that the government may allow price discounts to be reflected in the invoice during the transition.  

The notification had said that manufacturers or packer or importers must advertise about the revised MRP in one or more newspapers, besides circulating notices to dealers and to the director of legal metrology in the Central Government and controllers of legal metrology in the states and union territories, indicating the change in the price of such packages.  

Sources have now indicated that this too may change as small and medium enterprises may find it expensive to advertise. 

Changing prices on packets, requiring additional manpower, has been a cause of worry for FMCG companies. 

Implications  of the order

• Firms may be allowed to sell existing stock in its current form till GST-compliant packs are in
• Companies can revise MRP on unsold stock until Dec 31 or until stock is cleared, whichever comes sooner
• Govt may allow GST-related price changes to reflect in invoices, avoiding physical relabelling