What you need to know about price stickers after GST ruling- Legal Metrology
After the implementation of GST on goods and commodities of all kinds, it was compulsory for businesses to incorporate GST prices on pre-packaged goods. But recently GST rates were reduced on some products in June 2018.
The controller of GST has issued a permit to use price stickers for indicating the revised retail sale price of pre-packaged commodities after the GST rate changes with effect from 27th July 2018. These stickers are permitted to ensure that the advantages of reduction in GST rates reach the consumers.
Revised MRP Disclosure
The revised MRP must be declared by putting a sticker or by way of stamping or online printing. The original MRP must be displayed to show the comparison and reduction. Companies must also advertise the price change to notify the dealers and other stakeholders.
The Legal Metrology Department relaxed the revised MRP printing directly on the packaging by permitting the disclosure of new price through stickers after the cut in GST rates.
The permission to affix additional prices on the pre-packaged goods by way of stamping or through adding stickers was granted under the rule 33(1) and rule 6(3) of Legal Metrology Rules, 2011 for Packaged Commodities.
Here are some points mentioned in Legal Metrology Controllers letter:
- The old prices before the GST reduction and the new prices after the reduction of GST rates should be visible clearly on the labels, stickers or stamps on the packaging.
- The relaxation in printing the revised prices directly on the packaging is relaxed in case of unsold stock of commodities that have been manufactured, imported or packed when the GST rates were reduced w.e.f. 27th July 2018.
- The relaxation in printing the revised prices directly on the packaging will be applicable up to 31st December 2018.
- Any packing wrappers or material can be used till up to 31st December 2018 or till the packing material is exhausted – whichever is earlier after the price correction is mandated on account of GST rate reduction.
- The manufacturers, importers or packers must ensure that the reduced MRP on account of GST is passed on to the consumers and must assist and cooperate with the Local GST officers.
It might be a little complicated and cumbersome to keep up with revised MRP declaration post GST rate reductions and the subsequent notifications. In an effort to ensure your organization doesn’t suffer penalty, a Legal Metrology Registration consultant helps you understand and keep up with all the mandatory rules after GST rate changes ensuring that your business runs smoothly.
Unit sale price states the price (inclusive of all taxes) per unit of measurement as stated in Rule 6 sub-rule (11) of the Legal Metrology Packaged Commodities Amendment Rules, 2022.
“(11) The unit sale price in rupees, set out to the nearest two decimal places, shall be declared on every pre-packaged commodity in the following manner, namely:-
- Per gram where net quantity is less than one kilogram and per kilogram where net quantity is more than one kilogram.
- Per centimetre where net length is less than one metre and per metre where net length is more than one metre.
- Per millilitre where net volume is less than one litre and per litre where net volume is more than one litre.
- per number or unit if any item is sold by number or unit:
Note:
Stated that for packages commodity containing spirituous liquor or alcoholic beverages, the State Excise Laws and the rules made thereunder shall be applicable within the State in which it is manufactured. Stated that declaration of the unit sale price is not obligatory for the pre-packaged commodities in which retail sale price is equal to the unit sale price.”
The unit sale price shall be declared on the primary display panel of the pre-packaged commodity. It should be confirmed that the unit sale price is unambiguous, simply identifiable and legible to the consumer
Illustration:
For a pre-packaged commodity of Net Qty 200g and MRP including all taxes of ₹60, Unit Sale Price declaration can be specified as given hereinbelow:
- MRP ₹ (incl. of all taxes); USP ₹ 60; ₹ 0.30/g
- MRP ₹ (incl. of all taxes); USP ₹ 60; ₹ 0.30 per g
- MRP ₹ (incl. of all taxes) ₹ 60; USP ₹ 0.30/g
- MRP ₹ (incl. of all taxes) ₹ 60; USP ₹ 0.30 per g
- MRP ₹ (incl. of all taxes) ₹ 60; USP ₹ /g ₹ 0.30
- MRP ₹ (incl. of all taxes) ₹ 60; USP ₹ per g ₹ 0.30
For a pre-packaged commodity of Net Qty 5L and MRP inclusive of all taxes of ₹500, Unit Sale Price declaration can be specified as given hereinbelow:
- MRP ₹ (incl. of all taxes); USP ₹ 500; ₹ 100.00/L
- MRP ₹ (incl. of all taxes); USP ₹ 500; ₹ 100.00 per L
- MRP ₹ (incl. of all taxes) ₹ 500; USP ₹ 100.00/L
- MRP ₹ (incl. of all taxes) ₹ 500; USP ₹ 100.00 per L
- MRP ₹ (incl. of all taxes) ₹ 500; USP ₹ /L ₹ 100.00
- MRP ₹ (incl. of all taxes) ₹ 500; USP ₹ per L ₹ 100.00
As per Rule 6 and sub-rule 11, the Unit sale price is required to be indicated in rupees, rounded off to the adjacent two decimal places.
Illustration: as declared in response to question no. 2
The spacing condition under Rule 8 of the LMPC Rules, 2011 is not applicable for the Unit Sale Price declaration.
Option 1: The Font size for declaring the Unit Sale Price should be at least 50% of the font size of the MRP declaration. For Example, if the height of the numeral for MRP declaration is 4mm then the height of the numeral for Unit Sale Price declaration cannot be less than 2mm.
Unit sale price is not obligatory to be declared on a ‘Wholesale Package’ as stated in Rule 2(r) of LMPC Rules, 2011.
No, as per Rule 6 sub-rule 10 of the LMPC Rules, 2011, the e-commerce company is required to make sure obligatory declaration as declared in Rule 6 sub-rule 1. Accordingly, the unit sale price is not compulsory to be displayed on e-commerce websites.
No, the requirement of the Unit Sale Price declaration is only limited to product labels. Hence, the Unit Sale Price is not obligatory to be declared in advertisements.
As per the 2nd proviso to Rule 6 sub-rule (11) of unit sale price declaration is not required for the pre-packaged commodities where MRP or retail sale price is equal to the unit sale price.
Hence, pre-packaged commodities in which the net quantity/ length is one gram, one meter, one kilogram, one millilitre, one centimetre, one litre and one unit/number shall not be required to state the Unit Sale Price.
Yes, the Unit Sale Price needs to be declared, but the Unit Sale Price computation shall eliminate the additional volume/units/ quantity being offered for FREE.
An indicative label declaration is given below
CONTENTS:10 N (generic name of commodity) + 1 Free
MRP ₹ (incl. of all taxes):USP ₹ 400; ₹ 40.00 /1N + 1N Free
Net Qty:5 L + 1 L Free
MRP ₹ (incl. of all taxes):USP ₹ 1000; ₹ 200.00/ L + 1L Free
The Unit Sale Price is not needed to be declared on the inner package, however, the outer package must contain all declarations stated under the Rules along with the Unit Sale Price.
Yes, the Unit Sale Price is needed to be declared. Mostly, in such cases, the Unit Sale Price can be calculated by dividing the post-offer MRP (inclusive of all taxes) by the Net Quantity.
An indicative label declaration is given below.
CONTENTS:10N (generic name of a commodity)
MRP ₹ (incl. of all taxes):₹ 400 ₹ 360; ₹ 36.00 /1N
Yes, the Unit Sale Price is needed to be declared on the pack projected for sale, however, the Unit Sale Price computation shall eliminate the value of the product being offered for FREE. It is declared that there is no need of declaring the Unit Sale Price for a Free product.
An indicative label declaration is given below.
Net Qty:900 ml + 1 N (generic name of a commodity) Free MRP (incl. of all taxes).
USP ₹ 180 ₹ 0.20/ml + 1 N of (generic name of commodity) worth ₹ ___ Free
Pre-packaged commodities having a surface area of 100 square centimetres or less OR having MRP of ₹ 35 or less shall not be obligatory to declare Unit Sale Price.
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