Recent reforms under “GST 2.0” have led to major changes in Goods & Services Tax (GST) rates for many FMCG (Fast-Moving Consumer Goods) and retail products in India, effective from 22 September 2025. Alongside rate changes, there are regulatory requirements around Maximum Retail Price (MRP) ‒ particularly how existing stocks should carry revised pricing, how relabeling / stickering must be done, and how consumers must be informed.
For businesses in FMCG & retail, understanding these obligations is essential to remain compliant, avoid penalties, and preserve consumer trust.
Key changes to know
1. GST rate cut/revision
Many essential goods have seen GST rates reduced from 12% or 18% down to 5%.
2. Permission for MRP revision on unsold stock
Manufacturers, packers, and importers of pre‐packaged commodities may revise the MRP on unsold stock (i.e. stocks manufactured/packed/imported before 22 September 2025) to reflect the new GST rate.
3. Methods allowed for MRP update
The revised MRP may be declared via:
- Stickering
- Stamping
- Online printing
These methods are permissible so long as the original printed MRP remains visible and is not overwritten.
4. Deadline/Transition period
The permission to use existing packaging (with corrected MRPs) or wrappers, and to revise MRPs on unsold stock, is allowed until 31 December 2025 or until the stock is exhausted, whichever is earlier.
5. Communication requirements
To meet regulatory compliance:
- Publish at least two advertisements in one or more newspapers about revised MRPs.
- Circulate notices to dealers, retailers, Director of Legal Metrology (central), Controllers of Legal Metrology in states/UTs.
6. Prohibitions/Constraints
- Revised MRP difference must accurately reflect only the tax change. No extra profiteering.
- Original MRP cannot be removed / obscured. Revised MRP must be visible along with original.
7. Special rules for drugs, medical devices & pharmaceuticals
There are additional orders for drugs/formulations and medical devices. Manufacturers/marketing companies of these must issue revised price lists, inform state drug controllers, etc. For some devices, stickering is allowed within a 3-month period under specific rules.
Compare Old GST Rate vs New GST Rate
What FMCG & Retail businesses must do: Action plan
Here’s a checklist and recommended steps to ensure compliance and smooth transition.
| Step | Responsible Entity | What to do | Risk if not done |
| Audit existing stock | Manufacturers & packers | Identify unsold pre-22 Sep 2025 inventory, both at factory/packaging level and in distribution/retail channels. | To know what needs relabeling/stickering, to avoid expired stock with wrong MRP, to avoid liability under Legal Metrology or consumer protection. |
| Compute revised MRPs | Product pricing / tax teams | Calculate revised MRPs including the appropriate GST changes. Ensure the change corresponds exactly to the tax rate change (no more, no less). | If MRP change is wrong (too high), risk penalties, consumer complaints, anti-profiteering issues. |
| Choose method for labelling | Operations / packaging / supply chain | Plan whether to use stickers, stamp, online printing for unsold stock. Factor in logistics, costs, how many units, locations. | Efficient method = lower cost, faster compliance; poor planning could lead to bottlenecks or non-compliance. |
| Ensure original MRP remains visible | Packaging / quality control | When using sticker/stamp/print, ensure the revised MRP does not obscure the old. | Legal Metrology requires this. Violations can lead to penalties. |
| Update packaging material for new production | Product design / procurement | For all new packaging manufactured post change, ensure the MRP printed reflects the new rate. Update templates. | To avoid confusion, rework, or recall. |
| Communications & Notifications | Legal / compliance / communications teams | Publish the required advertisements; send notices to dealers / legal metrology authorities; inform retailers, distributors; possibly via internal trade communications | Documentation of communication is evidence of compliance; lack thereof could expose to regulatory action |
| Train retail trade / field staff | Sales & distribution | Inform retailers, dealers about how to sell existing stock, how revised MRPs work; ensure no over-charging. | To prevent complaints or violations under consumer protection laws. |
| Update pricing systems / POS / ERP | IT / Retail operations | Ensure point of sale systems, invoices, billing reflect new rates; retailers’ systems show correct MRPs. | Errors here could result in incorrect billing or display, confusion, possible enforcement actions. |
| Monitor & document compliance | Compliance / internal audit | Keep records of how many units were relabeled, when, communication copies, inventory movements. | Important for defending in case of audits / inspections. |
Interpretative clarifications and common misunderstandings
Is recalling old stock mandatory? No. The government has allowed existing packaging and unsold stock to be used until 31 December 2025, provided corrections (stickering/stamping/online printing) are applied. Recall is not required.
Must retailers relabel stock themselves? The main responsibility lies with manufacturers / packers/importers. Retailers need to ensure they sell at the revised MRP and are aware of the changes. Relabeling at retail level may be possible if stock is unsold, but that depends on agreements and supply chain roles.
Can businesses adjust MRPs upward if GST rate increases for certain items? Yes, but only to the extent of the tax increase, and under regulatory oversight. The same framework applies revised MRP must reflect the tax change, original MRP must remain visible, required communications must be made.
Is there risk of “profiteering” or penalty if business does not pass benefit of GST reduction? Yes. Under Section 171 of the CGST Act (Anti-Profiteering), businesses have an obligation to pass on benefits of tax rate reduction to consumers. Non-compliance may lead to regulatory action. Also, misleading MRPs or failure to correct may be challenged under the Legal Metrology Act and Consumer Protection Act.
Implications and opportunities
Brand trust & customer goodwill: Transparent pricing and visible benefit from GST reduction can enhance brand perception, especially during high consumer alert periods (festive season etc.).
Operational challenges: The need to manage updated labels, sticker inventories, staff training, coordination across supply chain. For smaller players, this may stretch resources.
Cost savings: Using existing packaging, avoiding large reprint/runs, minimizing wastage of packaging material can be cost-efficient if managed well.
Competitive differentiation: Brands that clearly communicate GST savings (e.g. via “new lower price from 22 Sept”) can gain an edge, particularly in retail promotions.
Risks and where to watch out
-Incorrect calculation of revised MRP or mismatch between GST rate change and MRP revised amount.
-Delayed communications or failing to advertise notices / notifications as required.
-Overwriting or removing original MRP – forbidden.
-Charging more than revised MRP from consumers.
-Inadequate documentation, which can be problematic during inspections by Legal Metrology officers, or consumer grievances.
Sample communication framework for FMCG company
Internal memo to trade / distributors: “Dear Trade Partner, effective 22 September 2025, the GST rate for (Category X) will be reduced from 18% to 5%. Accordingly, the revised MRP for products in these categories will reflect this tax change. For unsold stock, use the revised labels/stickers as communicated. Original printed MRP must remain visible. Please align your pricing and invoices accordingly.”
Retailer guidance note: “Please ensure that all products sold (including existing stock) reflect the lower MRP from 22 September. Stock purchased earlier can still be sold but with revised MRP visible. Do not charge more than the revised MRP. Update your POS systems.”
Customer-facing communication: “Good News! Thanks to GST rate revision, select everyday essentials will cost less from 22 September. All prices include all taxes, so what you see is what you pay.”
Conclusion
The GST rate revision and associated rules on MRP relabeling pose both a compliance mandate and an opportunity. Compliance is non‐optional: the Law of Legal Metrology, GST law (including anti-profiteering), and Consumer Protection demand that the revised GST benefits are passed to consumers, accurately reflected in MRPs, and that communication is clear.
Businesses that move swiftly—auditing stock, updating packaging/prices, communicating clearly—will mitigate risk, avoid penalties, and potentially strengthen consumer trust and market position. The December 31, 2025 deadline gives some breathing room; action now will avoid last-minute scrambling.
