What is the full form of MRP?
MRP stands for Maximum Retail Price.
The maximum retail price is the upper limit set by the manufacturer or distributor for retailers or final point-of-sale transactions on a commodity. To put it another way, it’s the highest price a merchant can charge you for that particular goods.
After accounting for all applicable taxes, the product manufacturer calculates and sets the highest price.
How is MRP being used?
Maximum Retail Price is utilized in a variety of ways, as we’ll see below:
- MRP marking is required on all products sold in India.
- Most stores charge less than the desired retail price depending on the real wholesale price of each product acquired in bulk. The manufacturer cannot legally enforce the calculated price as suggested using these methods.
- The shop may charge you more than the MRP in some isolated tourist sites or areas where a particular product is scarce, but this is illegal.
Why is MRP being criticized?
Maximum Retail Price is attacked for a variety of reasons, including its incompatibility with the free market and the following:
- The MRP concept has been deemed incompatible with the free market system. Because it involves producers, the earnings that retailers will receive are determined.
- By adding a service charge to the item price, you can simply get around the MRP. A cooling charge for cold drinks, for example, or requiring manufacturers to add a large MRP.
- India and Bangladesh have a maximum retail price rather than a list price.
What Are The Steps To Take As A Consumer When Retailers Charge More Than MRP For A Product?
When consumers are charged more than the MRP, they might pursue the following steps:
- The central government of India has set up the National Anti-profiteering Agency to verify whether the ITC is provided by a registered person or whether the reduction in the tax rate results in the price reduction and the same is delivered to the customers. This makes sure that prices stay under control and that companies do not capture excess profits.
- Customers have the right to file a complaint if a retailer adds GST on the maximum selling price. Consumers can submit a complaint with the government or with one of India’s Anti-Profit Boards. Retailers are prohibited from charging more than the MRP. A retailer can, however, sell for less than MRP.
How to Explain MRP increase/decrease after GST?
These are some basic terms to explain MRP increase/decrease:
- There have been several modifications in the tax rate for a variety of products after the implementation of GST in July 2017. This has an impact on a product’s MRP.
- Taxpayers may not be able to claim the ITC depending on the GST rate. The price will not drop in these circumstances. The necessity to update the maximum retail price arises from the constant modification of GST impositions and GST tax rates.
- For example, after the implementation of GST, the price of FMCG products will be reduced to pass on the benefits of lower GST prices and ITC benefits.