Practical FAQs on Price Revision under GST 2.0 w.e.f. 22nd September 2025

Q 1. Is immediate revision of MRP required after a GST rate change?

Ans: Yes. As per DoCA Circular dated 09.09.2025 and Legal Metrology (Packaged Commodities) Rules, 2011, revised MRPs must be affixed immediately by stamping, sticker or online printing on package of unsold inventory by manufacturers, importers or packers and advertised in 2 newspapers. Delay may invite penalty for unfair trade practice.

Reference: DoCA Circular (09.09.2025); Legal Metrology Rules, 2011, Rule 6(3); NPPA guidelines during GST rollout.

Q 2. Are there sector-specific rules for sensitive products (e.g., pharmaceuticals)?

Ans: Yes. Pharmaceuticals are governed by Drugs (Prices Control) Order, 2013 (DPCO). The Supreme Court in Glaxo SmithKline Pharmaceuticals Ltd. v. UOI held that reduced prices must apply uniformly across batches. NPPA mandates immediate compliance.

Reference: DPCO, 2013; SC Judgment in Glaxo SmithKline Pharmaceuticals Ltd. v. UOI; NPPA Guidelines.

Q 3. What if old MRP stock remains unsold after a GST rate reduction?

Ans: As per Legal Metrology (Packaged Commodities) Rules, 2011, a revised MRP sticker to be affixed, ensuring both old and new MRPs are visible.

Reference: Legal Metrology Rules, 2011; DoCA guidelines.

Q 4. Is upward revision of MRP permissible when GST rates increase?

Ans: Yes. MRP may be increased proportionately, with intimation to authorities. However, profiteering beyond the tax hike is prohibited under Consumer Protection Act, 2019.

Reference: Consumer Protection Act, 2019 (Unfair Trade Practices); DoCA Circulars.

Q 5. What happens if benefits are not passed on to consumers when National Anti-profiteering Authority or CCI ceases.?

Ans: Post 31.03.2025, NAA/ CCI ceases but section 171(2) of the CGST Act still operative and action may also be taken under:

• Consumer Protection Act, 2019 (Unfair Trade Practices)
• Competition Act, 2002 (abuse of dominance/unjust enrichment)

Q 6. Is there judicial precedent on passing GST benefits?

Ans: Yes. In Reckitt Benckiser India Pvt. Ltd. v. UOI (2024, Delhi HC), it was held that the entire benefit of tax reduction must flow to consumers; unjust enrichment is not permissible.

Reference: 2024 (1) TMI 1248 – Delhi High Court; Section 171, CGST Act, 2017.

Q 7. Do GST 2.0 rate revisions affect services with fixed-price annual contracts?

Ans: Yes. In service contracts spanning multiple months or years, the applicable GST rate is determined at the time of supply under Section 13 of the CGST Act. If the rate changes mid-contract, invoices issued after the change must reflect revised tax. Courts in various cases have stressed that tax incidence follows statutory provisions, not private contracts. Hence, businesses must pass on tax benefits or costs even in fixed-price contracts.

Q 8. Can e-commerce platforms be held liable for non-revised MRPs displayed online?

Ans: Yes. Under the Consumer Protection (E-Commerce) Rules, 2020, platforms must ensure accurate disclosure of MRPs. If suppliers fail to update MRPs post-GST rate changes, platforms may face joint liability for misleading prices. Platforms have compliance obligations when they actively control listings.

Q 9. How should businesses deal with transitional stock where labels cannot be modified?

Ans: Where relabelling is impractical, businesses may rely on Rule 33 of Legal Metrology Rules, which allows continued sale with dual price declaration (original and revised MRP). The DoCA circular dated September 09, 2025 explicitly permits this until December 31, 2025. The guiding principle is that the consumer should pay the lower of the two MRPs, consistent with SC ruling in Glaxo SmithKline Pharmaceuticals Ltd. v. UOI (2013).

Q 10. Can businesses advertise price revision as “voluntary compliance” to gain goodwill?

Ans: Yes. Section 37, Consumer Protection Act, 2019 encourages fair disclosures. Voluntary price cuts can be advertised. However, misleading claims (e.g., discounts projected as GST benefit) violate Section 2(28), CPA, 2019 on misleading advertisements.

Reference: Consumer Protection Act, 2019 (Sections 2(28) & 37).

Q 11. Is failure to revise MRPs after GST 2.0 a criminal offence?

Ans: Yes. Section 36, Legal Metrology Act, 2009 prescribes penalties: fine up to ₹25,000 for first offence, and imprisonment for repeat offences. Though GST anti-profiteering ceases after 31.03.2025, DoCA circulars and consumer law still mandate compliance.

Reference: Section 36, Legal Metrology Act, 2009.

Q 12. Can businesses pass GST rate reduction benefits by increasing product quantity (grammage)?

Ans: Yes, if transparent. In Ankit Kumar Bajoria v. Hindustan Unilever Ltd. (NAA, 2018), grammage increase was accepted. Later narrowed, but Delhi HC upheld grammage as a valid method under Legal Metrology Rules when benefit equals tax cut.

Reference: NAA Case – 2018; Delhi HC ruling; Legal Metrology (Packaged Commodities) Rules, 2011.

Q 13. Can benefit be given by way of free supply or extra quantity?

Ans: Yes. If the benefit is real, quantifiable, and supported by records. For example, “extra quantity at same price” is acceptable as long as it fully reflects GST reduction.

Reference: Section 171, CGST Act, 2017 (Anti-profiteering provisions applicable till 31.03.2025); Reckitt Benckiser India Pvt. Ltd. v. UOI (2024, Delhi HC)

Q 14. If goods are exported, must MRPs still be revised post-GST 2.0 rate change?

Ans: No. Exports are zero-rated under Section 16, IGST Act, 2017. MRP requirements apply only to domestic retail packs under Legal Metrology Act. Export contracts may need separate pricing adjustments.

Reference: Section 16, IGST Act, 2017; Legal Metrology Act, 2009.

Q 15. Can relabelling of MRP be replaced with discounts or grammage increase?

Ans: For stock manufactured before GST rate cut, Legal Metrology Rules (Rule 6(3)) permit relabelling/re-stamping of revised MRP whereas for new stock after SGT 2.0, businesses may decide method (rate cut, discount, or grammage). Transparency is mandatory.

Reference: Legal Metrology (Packaged Commodities) Rules, 2011; DoCA Circulars.

Q 16. Can grammage be increased on existing unsold stock to pass on benefit?

Ans: No. For pre-packaged goods already in the market, grammage cannot be changed. Only relabelling with revised MRP is permissible.

Reference: Legal Metrology (Packaged Commodities) Rules, 2011.

Q 17. Can discounts be offered on pre-packaged products instead of revising MRP?

Ans: No. Discounts are non-transparent since consumers cannot verify tax benefit. Hence, only relabelling/reprinting revised MRP is acceptable. Discounts may apply for non-prepackaged goods (e.g., automobiles).

Reference: DoCA & Legal Metrology Guidelines.

Q 18. Is there any GST official check on price revision?

Ans: Yes. The Finance Ministry directed CGST field officers to submit monthly brand-wise MRP comparison reports for 54 common items (e.g., butter, toys, thermometers) to CBIC after GST rate cuts (effective 22 Sept).

Reference: CBIC Instructions to CGST Zones, September 2025.

Q 19. Can the benefit of GST rate reduction be adjusted against future supplies?

Ans: Yes. Credit notes or rebates can be issued under Section 34 of the CGST Act, 2017. Courts have recognized this as compliant if the benefit is identifiable and ultimately passed on to customers.

Reference: Section 34, CGST Act, 2017.

Q 20. Is it mandatory for a supplier to pass on the benefit of a tax rate reduction to the government?

Ans: No. The primary obligation is to pass on the benefit to the recipient via a commensurate price reduction, as per Section 171 of the CGST Act, 2017. If not passed to recipients, the profiteered amount must be deposited into the Consumer Welfare Fund under Section 57 of the CGST Act.

Q 21. What are the potential consequences if a supplier fails to pass on the benefit of a tax rate reduction?

Ans: Consequences include orders to reduce prices, return undue benefit with 18% interest to the recipient (or deposit to Consumer Welfare Fund if recipient untraceable), and a penalty of 10% of the profiteered amount under Section 171(3A) of the CGST Act. GST registration cancellation is also possible in severe cases.

Q 22. What is the time limit for initiating anti-profiteering proceedings against a supplier?

Ans: The GST law does not specify a time limit. However, the Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. UOI [2024 (82) G.S.T.L. 344 (Del.)] held that proceedings must be initiated within a “reasonable period,” noting that a 4-5 year delay would be unreasonable.

Q 23. Can a supplier use increased advertising or promotional expenses to justify not lowering prices after a tax rate cut?

Ans: No. Increased business costs like advertising generally cannot justify not passing on the benefit of a tax rate reduction. Section 171 of the CGST Act mandates that the benefit be passed on through a commensurate price reduction. The focus remains strictly on the tax benefit, as affirmed in Reckitt Benckiser India Pvt. Ltd. v. UOI.

Q 24. If a product’s tax rate is increased (e.g., from 5% to 12%), can a supplier immediately increase the MRP on existing stock?

Ans: Yes, but with strict compliance. The supplier can increase the price, but the original MRP must remain visible, and the new price clearly indicated (e.g., via sticker) as per the Legal Metrology (Packaged Commodities) Rules, 2011. Public advertisement of the price change is also required.

Q 25. Is the anti-profiteering mechanism applicable only to goods, or does it also apply to services?

Ans: It applies to both goods and services. Section 171 of the CGST Act, 2017, explicitly states that “any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient.”

Q 26. What is the role of the Competition Commission of India (CCI) in anti-profiteering matters now?

Ans: Since December 1, 2022, the Competition Commission of India (CCI) adjudicates all new anti-profiteering cases, taking over from the National Anti-profiteering Authority (NAA). Investigation reports are now submitted directly to the CCI for decision. But, both NAA/ CCI ceases to exists w.e.f April 1, 2025.

Q 27. How is a “commensurate reduction” in price calculated? Is there a fixed formula?

Ans: There is no fixed formula in the GST law. Calculation depends on specific facts, industry, and market dynamics. Authorities compare pre- and post-rate-reduction prices and profit margins to ensure the tax benefit is passed to the consumer, as noted in the Reckitt Benckiser case.

Q 28. Are there any exceptions or defenses a supplier can use against an allegation of profiteering?

Ans: Limited defenses exist. A supplier might argue the benefit was passed on by increasing product quantity for the same price, or that price adjustments were due to unrelated, verifiable cost increases. However, the primary expectation under Section 171 of the CGST Act is a price reduction, and authorities are stringent on unrelated cost claims.

Q 29. Does the anti-profiteering mechanism apply to products sold at a loss?

Ans: Yes. The anti-profiteering provisions can apply even if products are sold at a loss. The focus of Section 171 is on whether the specific benefit from a tax rate reduction has been passed on to the consumer for that particular product, irrespective of the supplier’s overall profitability.