Valuation of MRP Goods in GST Regime

Anmol Kumar

September 30, 2019

MRP Under GST Regime
  • GST is already included in the MRP. If you are charged unfairly over the MRP, you can complain at toll-free no. 1800-11-4000/14404
  • 31st March 2018 is the deadline for selling old stock before GST with new MRP stickers.
  • No deadline extention to sale pre-GST packed products.

The much anticipated ‘Goods And Services Tax’ has been rolled out from the 1st July in India, making the dream of ‘One Tax, One Nation’ a reality. As expected, a lot of hue and cries are being seen all across the country, mostly related to the MRP and supply of goods and commodities. The government is making all it’s effort to enlighten people about GST and is actively addressing all the doubts and rumours circulating in the air.


Valuation of MRP Goods in GST Regime

The Revenue Secretary Dr. Hasmukh Adhia said that a Central Monitoring Committee has been constituted to assess the situation of pricing and supply of commodities, after the rollout of the Goods and Services Tax (GST). Addressing a press conference in Delhi, Adhia said meetings are being chaired every week with the aforementioned committee, headed by the Cabinet Secretary.

He said, “A committee has been constituted comprising 15 secretaries from departments that are in direct contact with consumers, to monitor commodity pricing and client groups. Although no field work is involved, officials will have to monitor four to five districts along with the assigned Link officer”.

When queried about the initial feedback received after the implementation of GST, Mr. Adhia revealed that the new taxation framework has been well received. He further also adds that situation is being closely monitored by the all the competent departments. “The GST has been well accepted. All state governments other than Jammu and Kashmir have complied with all norms. I would urge that if there is any difficulty, please give us feedback, since it is important for us to know. So far, no problems have been detected,” told Hasmukh Adhia.

Example of MRP valuation under GST

Let’s consider an example of ABC, a manufacturer, selling tools and valuation of supply under gst hardwares as polishers, drills, spades etc. It sells a polishers to XYZ a wholesaler. The MRP is Rs. 5,500 but XYZ sells it for Rs. 1000.

The invoice looked like

Polishers 1000
Add: Excise @ 12.5% 125
Subtotal 1125
Add: VAT @14.5% (on subtotal) 164
Total 1289

Value of supply under GST

The value of goods or services supplied is the transaction value such that the price payable, which is Rs 1,000 in the example. Suppose that CGST=9% and SGST= 9%

Polishers 1000
Add: CGST @9% 90
Add: SGST @9% 90
Add: VAT @14.5% (on subtotal) 164
Total 1180

GST on MRP or Discounted Price

Responding to question raised on the Maximum Retail Price (MRP) of commodities under the GST, Avinash K. Srivastava, Secretary-Department of Consumer Affairs, clarified that all distributors and manufacturers must print the complete details of the original and revised MRP on the product. “The retailers must furbish all details of price and the revised rate. If there is an increase, an additional notification needs to be sent out, apart from printing both rates on the product packaging,” he said.

Adding to above statement, Adhia said dealers registered under the GST Composition Scheme do not have to show tax, while other registered dealers will have to clearly show the tax split up. He also revealed that while commodities do not attract any cess, but, vehicles crossing state borders will continue to be charged, unless they have a national permit. “22 states have removed check posts so far, and we are expecting the others to comply as well. The tax on vehicles is on crossing borders, and not on the goods being transported. Therefore, that will have to be paid,” said Adhia.

Query On Tamil Nadu Theatre Strike Issue

When queried about the Tamil Nadu theater owners strike against the additional tax levied by the local government body, Adhia clarified that state governments have additional power to tax firms and industries, on behalf of the municipal corporation. “Just like the Centre levies excise duty, state municipal bodies also have the power to levy taxes apart from GST,” he said.

Response On The Taxing Commodities For Physically Disabled

Clarifying the difference of opinion regarding taxing commodities used by those with physical disabilities, Adhia asserted that it would be beneficial since it would bring down import prices. “Our import would be affected if the tax rate is made zero. It is kept at 5 percent since import would be cheaper, and there would be no impact on the raw materials used to manufacture these products,” said Adhia.

You can also download GST Helpline App to read latest updates, news, useful discussion, Government policies, rules and law about GST.


4 Replies to “Valuation of MRP Goods in GST Regime”

  1. Their was a 50% discount on jeans of MRP RS.1490/-. A store charged me GST after giving discount of RS.745/-. If MRP is inclusive of all taxes then they should not charge GST after giving discount. If I make the total the cost goes to more than RS.1490/- in the bill.

  2. I have had the same fraudulently double taxation applied to my purchase last week from Zivame. When queried their response is that it is according to ‘Government policy’ that they are applying a second additional GST on items that are discounted! Can I ask, where is this Government of India legislation that says a seller can apply GST twice?

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