MRP includes all, GST too

Pushpa Girimaji

Last month, I bought a mixer-grinder with an MRP of Rs 3,200. However, when I went to pay for it, I was charged an additional amount as Goods and Services Tax (GST). When I protested, he argued that the MRP was inclusive of taxes in the old regime and now in the GST regime, the taxes have to be added to the price. Is this the correct position?

No, this is totally false and the shopkeeper has blatantly misled you and overcharged you. In fact, he has charged taxes from you twice because the MRP already includes GST. To that, he has added taxes again and obviously pocketed the amount. It is also possible that the incidence of GST he has charged is much more than what is imposed on mixer-grinders. Under the Legal Metrology (Packaged Commodities) Rules, all packed goods have to mention the Maximum Retail Price (MRP) inclusive of all taxes and the taxes mean Goods and Services Tax. Charging more than the MRP is an offence under the Legal Metrology Act, 2009.

Let me quote some of the relevant provisions to help you take up your case before the retailer.

Rule 6 of the Legal Metrology (Packaged Commodities Rules), 2011, formulated under the Legal Metrology Act, 2009, stipulates the declarations to be made on every package and this includes, under 6 (e), the retail sale price of the package.

The ‘retail sale price’ is defined under the rules (Rule 2, Definitions) as the “maximum price at which the commodity in packaged form may be sold to the ultimate consumer” and it also mandates that this price shall be printed as ‘Maximum Retail Price’, which is (inclusive of all taxes).

Rule 18 (2) prohibits the sale packed goods at a price exceeding the printed price or the retail price specified on the package. Rule 18 (6) says that the manufacturer or packer or the importer shall not alter the price on the wrapper once printed and used for packing.

Rule 18 (5) also says that no wholesale dealer or retail dealer or other person shall obliterate, smudge or alter the sale price indicated by the manufacturer or packer.

Once the GST Act and Rules came into being, the department of legal metrology clarified on July 4, 2017, that on all those goods packed prior to July 1, 2017, the manufacturer or the packer can declare the changed or the revised MRP by stamping or putting a sticker or through online printing. However, this would be permitted till September 30, 2017 only, the government said. 

The department also clarified that the revised price should not obliterate the original MRP, which should also be clearly visible. And the revised price should not be higher than the actual incidence of taxes or GST charged.

I must also mention that the website of the Central Board of Excise and Customs gives you the rate of GST on various commodities (https://cbec-gst.gov.in/gst-goods-services-rates.html). So, you can use this to check whether the GST being charged is correct. The CBEC has also launched a ‘GST rates finder ‘mobile app to help consumers.

What should be my next step now? How do I get back the excess money paid?

Tell the retailer that he has overcharged you and this constitutes an unfair trade practice under the Consumer Protection Act and also a violation of the Legal Metrology (Packaged Commodities) Rules. Ask him to return the excess amount charged and also compensate you for the money spent by you to travel again to the shop to claim the refund.

If he does not comply, you must lodge a complaint before the consumer court, seeking not just refund of the excess amount charged and reimbursement of your travel expenses, but also compensation for the harassment caused to you. You can also ask the consumer court to calculate the excess amount charged by the retailer from all consumers (on the basis of his sale figures) and deposit the amount in the Consumer Welfare Fund. You can also ask for punitive damages and costs of litigation. Remember, under the Consumer Protection Act, the retailer is guilty of unfair trade practice for misleading you, for overcharging you and for violating the Packaged Commodities Rules.

You must also lodge a formal complaint with the department of legal metrology in your state. Give them a copy of your cash receipt for proof. This will ensure that the retailer is prosecuted for violation of the law. It will also prevent him from fleecing other customers.