Should Your MRP Reduced after GST Rate Cuts??

Should Your MRP Reduced after GST Rate Cuts?? the next question come in mind After 56th GST Council Meeting ‘s decision of rate cuts.Let’s decode the impact of 56th GST Council decisions on the consumer prices.

Introduction

After rate deductions, what do you think? Should your MRP go down or not?

In our opinion, yes, it should reduce — because the government’s clear objective behind these cuts is to lower the cost of products for consumers. Even the Finance Minister has personally stated (source: Times of India) that the benefit of GST reduction must reach the end consumer.

So the important question is:
How should businesses reduce MRPs, and by how much? Let’s break it down with calculations and examples

GST Council’s Decision – Effective from 22nd September 2025

The 56th GST Council Meeting has proposed several rate reductions effective 22-09-2025.

Now, businesses are asking:

• Should I increase or decrease my MRP?
• What calculation do I need to do?
• The answer is simple: Yes, you must adjust your MRP — either upwards or downwards depending on whether the GST rate has gone up or down. Since GST is already embedded in MRP, any change in rate directly impacts consumer pricing.

As the Finance Minister emphasized, the rate cut is meant for consumers. How much benefit actually reaches them depends on how businesses pass it on — which can be easily understood through the following table:

Change Required in MRP

Now Let’s understand above table with the help of Example:

Here you can clearly see:

If MRP is reduced, consumers get the true benefit of GST cuts. If MRP is not reduced, businesses enjoy an unintended profit margin, which goes against the spirit of the rate cut.

What the Law Says – Legal Metrology Rules

For MRP changes, businesses must also follow the Legal Metrology Act & Legal Metrology (Packaged Commodities) Rules, 2011.

The rules say:
In case of a revised (reduced) MRP, a sticker showing revised price may be affixed, but it must not cover the original printed MRP. This ensures transparency for consumers.

New Circular – Valid Till 31st December 2025

Issued byThe Ministry of Consumer Affairs, Food and Public Distribution.  Date 09-09-2025.

• The Legal Metrology Division has issued a fresh circular in light of GST rate changes. Businesses are now allowed to revise MRPs of unsold pre packaged-commodities (manufactured/packed/imported before 22-09 2025) by either adding or reducing the tax difference
• This is valid till 31st December 2025 or clearance of stock, whichever is earlier.

Key Provision of Circular

1. Permission for Revised MRP

• Companies can declare revised MRP on unsold stock that was Manufactured/packed/imported before the GST change, by stamping, sticking labels,or online printing.
• This is valid up to 31st December 2025 or until existing stock is cleared, whichever is earlier.

2. Conditions to Follow

• Original MRP must remain visible. The revised price cannot overwrite it.
• If GST is increased → The revised MRP cannot exceed the actual GST increase.
• If GST is reduced → The revised MRP must be reduced, and Benefit pass to end consumer.
• Publicity requirement → Companies must issue at least two newspaper advertisements and notices to dealers as well as Legal Metrology authorities about the revised MRP.

3. Packaging Material Already Printed

• If packaging material/wrapper was printed before GST change, it can still be used till 31st December 2025 or until exhausted.
• However, revised MRP must be correctly displayed on the package by stamping/sticker/online
  printing
• For Manufacturers/Importers: They don’t need to scrap old stock or packaging. They can simply relabel MRPs.
• For Consumers: Ensures benefit of GST rate reduction is passed on and protects from overcharging.
• For Government: Compliance monitoring is possible through Legal Metrology officers and mandatory advertisements

Download PDF of Circular- Legal Metrology Act