The display of maximum retail price (‘MRP’) on pre-packaged commodity is governed by the Legal Metrology Act, 2009 (‘LM Act’) and the Legal Metrology (Packaged Commodities) Rules, 2011 (‘LM Rules’) made thereunder.
Rule 2(m) of the LM Rules defines MRP or retail sale price as the maximum price at which the commodity in packaged form may be sold to the consumer inclusive of all taxes as per. Therefore, MRP is always inclusive of Goods and Services Tax (‘GST’).
With the rollout of GST 2.0 reforms and the consequent revision of GST rates, various situations have arisen where there has been an increase or decrease in MRP, and the question has arisen with respect to the manner of reflecting the revised MRP on unsold stock.
Reduction in MRP of Packaged Commodity
It is pertinent to note that generally, it is not permissible to affix individual stickers on the package for altering or making mandatory declarations on the package. However, the proviso to Rule 6(3) of the LM Rules permits for affixing stickers for the purpose of reducing the MRP. It specifically provides that manufacturers or packers may affix a sticker showing the revised lower MRP ensuring that such a sticker does not cover or obscure the original printed MRP.
Furthermore, it is also pertinent to note that Rule 18(3) of the LM Rules provides that if any commodity has been pre-packed for sale and the applicable tax is subsequently revised, the retail dealer or any other person must not sell the packaged commodity at a price exceeding the revised MRP as communicated by the manufacturer or packer.
This places an express duty on the manufacturer/packer to promptly communicate any change in MRP throughout its supply chain, supported by publishing two advertisements in reputable newspapers and issuing formal notices to the dealer, the Director in the Central Government, and Controllers of Legal Metrology. Notably, Rule 18(3) does not itself mandate that the MRP must be revised; rather, it creates a compliance mechanism so that, once the manufacturer or packer does communicate a revised MRP, the dealer must adhere strictly to that price ceiling.
Previously, at the time of introduction of GST in July 2017, followed by the GST rate reduction in November 2017, the Department of Consumer Affairs (Legal Metrology Division) issued various orders[1] relaxing the provisions of LM Rules and to permits the manufacturers or packers or importers or even wholesalers and retailers of pre-packaged commodities to declare the revised (increased or decreased) MRP on the unsold stock by way of stamping, putting stickers or online printing subject to certain conditions such as advertisements and circulation of notice to specific persons. Given this precedent, a similar approach is likely to be followed during the current GST 2.0 reforms to facilitate smooth adjustment of MRPs in line with revised GST rates.
Companies will have to analyse the manner of re-stickering/packaging of the products to display revised MRP basis the location at which the unsold stock is kept (warehouse, SEZ, retailer, dealers etc.) and the licenses held by the Company under the LM Act.
Reduction in MRP of scheduled and non-scheduled drugs under the DPCO
It is also pertinent to note that LM Rules are not applicable to packaged commodities containing scheduled formulations and non-scheduled formulations covered under the Drugs (Price Control) Order, 2013 (‘DPCO’), made under Section 3 of the Essential Commodities Act, 1955.
Pricing of such formulations is governed by the National Pharmaceutical Pricing Authority (‘NPPA’). Following the GST rate reduction in October 2024, NPPA issued an office memorandum[2] directing companies to reduce MRPs in line with the GST reduction. A similar advisory is anticipated currently.
Requirement to disclose the revised MRP
Section 2(9)(ii) of the Consumer Protection Act, 2019, provides that the consumer has the right to be informed about the price of goods and services to protect against unfair trade practice. Therefore, it may be inferred that consumers must be informed about the revision of MRP resulting from change in GST rates.
Furthermore, the Ministry of Finance has issued FAQs after GST Council in its 56th meeting held on 3 September 2025. As per FAQ 11[3], on goods supplied on or after the revised GST rates are notified, the new GST rates will be applicable on the outward supplies of goods. Thus, it is important to comply with provision of the LM Rules pertaining to MRP once the GST rates are notified.
While certain aspects await further official clarifications, it is advisable for manufacturers, packers, importers and dealers to stay aligned with the LM Act and LM Rules.
[1] https://consumeraffairs.gov.in/public/upload/files/Impact%20of%20GST%20on%20unsold%20stock%20of%20pre-packaged%20commodities_0_1733291448.pdf; https://consumeraffairs.gov.in/public/upload/files/Notification_16Nov2017_0_1733291571.pdf
[2] Press Release:Press Information Bureau
[3] Press Release:Press Information Bureau