GST rate cut: 15,000 cases of MRP violations booked across India

New Delhi: Aimed at providing transparency, the Legal metrology has booked over 15,000 cases of MRP violations across India, with restaurants figuring among the top violators, according to a Times of India report.

This comes almost after a month the Goods and Services Tax (GST) council slashed rates on 212 items. However, even after slashing GST rates, the entire benefit is yet to reach consumers.

According to the report, the fast moving consumer goods (FMCG) sector, especially bottled mineral water and aerated drinks, is found to be most vulnerable to illegal trade practices.

“Cases of MRP violations and anti-profiteering are being registered across the country and we are compiling a report based on inputs from individual states. It’ll be submitted to the Parliament on December 15,” BN Dixit, director of the department of consumer affairs, Government of India told TOI.

The department also submitted a report to the government on fake packaged food brands.

Earlier on Wednesday, the Supreme Court has allowed hotels and restaurants to sell bottled water and other packaged products at above the maximum retail price printed on these items. The apex court said that they can also render a service and cannot be governed by the Legal Metrology Act.

The government had threatened those selling bottled water at more than its maximum retail price (MRP), including at restaurants, hotels, and multiplexes could attract heavy penalty and jail terms.

The government on Tuesday informed the Supreme Court that there was a provision in the law that penalizes selling of packaged drinking water above its MRP.

Meanwhile, Dixit said a few sectors were compliant with the anti-profiteering clause of the GST law and were promptly passing the benefit of lower prices to consumers. Many sectors were still selling goods at older prices, he added.

With a vision to protect consumer interest, the Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for the creation of the GST anti-profiteering body.

The committee will ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.

The GST Council had on November 15 reduced tax rates and moved 177 items from the highest slab (28%) to 18% and lower brackets.

“If traders affix the new MRP, then it must not mask the older one, as the consumer should know the difference between the old and new price. But many traders are found to be selling at old MRPs. There have been instances where sellers are collecting higher prices than the old MRP in the guise of GST,” M Mamatha, assistant controller of Karnataka Legal Metrology was quoted as saying from the TOI.

However, traders are upset over frequently changing GST rules, making compliance practically impossible.

“The concern is that traders have already paid 28% GST and they should collect 18% tax from consumers. There’s no clarity on how they will get back 10% of the excess tax they have paid,” B T Manohar, chairman of states taxation committee of FKCCI and member of Karnataka state GST advisory committee told TOI.