By revising the Standards of Weights and Measures Act (Packaged Commodities’ Rules) in 1990, the Ministry of Civil Supplies, Department of Legal Metrology, established the MRP on all customers’ packaged commodities. Its purpose was to prevent tax evasion and protect customers from profiteering in stores. Manufacturers may print either the maximum retail price (including all taxes) or the retail price before the change (local taxes extra). However, manufacturers that selected the latter method realized that retailers typically charged more than the municipal taxes. As a result, an amendment has been suggested that would require MRP to be printed on all packaged items.While the objective to safeguard consumers in a pre-liberalized India is admirable, the system’s continuation now makes little sense. In India, MRP is a one-of-a-kind, outdated, and dysfunctional technique. India may be the only country in the world with a legal framework that makes charging a price more significant than the written maximum selling price illegal. The method of having a universally enforced printed price is considered price-fixing in most nations and is hence forbidden as anti-competitive.
What is MRP?
MRP stands for Maximum Retail Price in its complete form. The maximum retail price, or MRP, is the most outstanding price charged in a particular nation for a specific product. The maker of such a product determines the maximum retail price. The maximum retail price (MRP) is calculated by adding the cost of the goods, shipping, and any additional government taxes levied on the commodity, which varies per product. The merchant may sell the items at a lower price than the market price in some cases.A maximum retail price is a method of preventing sellers and retailers from selling a product for more than the market price. However, in tourist areas, particularly in hill stations where some items are not readily available, some products may be paid more than the MRP. As a result, the retail price is more than the maximum. Following the revision of the Standards of Weights and Measures Act, 1997, the maximum retail price was first introduced in India in 1990.
MRP critics
The notion of MRP has been heavily challenged since its inception. However, some of the reasons behind MRP’s classification are as follows:
- MRP was chastised when contrasted to the free market system because, with MRP, producers are in charge of setting the price and determining how much profit merchants will make.
- Adding extra production quantities, such as a chilling fee for cold drinks, can be used to alter the MRP.
- The producer can sometimes set the MRP of a product up to 10 times the estimated retail price.
- People in rural regions do not have access to a wide range of products since shops cannot charge more than MRP in rural areas due to the higher transportation costs.
Legal metrology regulations govern the maximum retail price(MRP) idea, PCR, 2011, and according to this rule –
- Packaged items must be labeled with the MRP and the product statement
- The items shown by a seller on an e-commerce shop must include all relevant information, such as the manufacturer’s name and address, packer’s name and the importer and addresses, net content, MRP, and customer service phone numbers
- There can’t be two MRPs on the same item
- The font size of the MRP and any other information, such as the expiration date, should be significant to make it easier for the client to read
- According to the PCR, the MRP and statement on medical equipment such as valves, thermometers, and so on must indicate the PCR
New MRP rules
Following the adoption of GST, the government issued new MRP guidelines, which are as follows:
- If the price of a product rises after GST, at least two advertisem*nts shall be placed in the newspaper
- Products that have been reduced due to the GST adoption do not need to be advertised in the newspaper
Conclusion
MRP India’s regulations and laws have aided individuals in various ways. For example, a shopkeeper cannot charge more than the MRP. The dual pricing system was discontinued by implementing the 2011 rules modification to protect customers from retailers’ deception. Consumers are now aware of their rights and can file a complaint with the consumer redressal court if defrauded. Following the advent of GST, retailers are prohibited from charging more than the MRP in the name of GST. It is critical to comprehend MRP and its regulations and the fact that all rules and laws will only be effective if customers are aware of their rights and responsibilities and act accordingly.
