Article
GST calculated on MRP?
Maximum Retail Price or MRP is governed by Legal Metrology Act, 2009. MRP is a manufacturer calculated price which is the highest price, that can be charged for a product. The retailer cannot charge more than MRP from the customer.
After the implementation of GST in India, there has been lots of change in the percentage of taxation for various products resulting thereby increase or decrease in MRP. Once, the GST was implemented in India, there has been continuous amendment in the rates of GST of various products. Due to the imposition of GST and continuous change in the GST rates for the various products, then there would be a need to revise the MRP.
What is GST in MRP?
As we already read MRP is the Maximum Retail Price, which is the highest price charged for a product in India, MRP on a product is inclusive of all the taxes, including GST. That’s one of the major reasons why, retailers cannot charge anything above MRP. When you see the MRP of a product, you must know that the amount is inclusive of all the taxes.
What is the Increase and Decrease in MRP due to GST?
There are times when due to the change in GST, there is a need for change in MRP of the unsold stock as on the day of the imposition of GST or change in GST rate. The MRP is supposed to be revised and declared through stickers / online printing/ stamping by satisfying the conditions mentioned-below: -
- Original MRP should be displayed clearly on the product and the revised MRP should not be overwritten on the original MRP.
- The difference cannot be more than the net price increase on account of incidence of tax after factoring in and taking into consideration excess availability of input tax credit under GST and also considering the deemed credit available to the traders under the proviso to section 140 (3) of the CGST Act, 2017.
- The person willing to revise the MRP is required to give two advertisements in one or more newspapers and the same needs to be intimated to the Director Legal Metrology and Controllers of Legal Metrology in the states.
