Satish Marathe, appointed by the government to the central board of the RBI in August, said, "it is high time that apart from printing MRP on products, companies should also start giving the (manufacturing) cost of products. Only then, will we really know the margins of profit."
The department found that small traders to big shopping malls and even multiplexes and prominent MNC food chains were allegedly indulging in this fraud, he said.
The group of ministers, headed by Assam Finance Minister Himanta Biswa Sarma, has in its recommendation to the GST Council on easing compliance burden on small and medium enterprises suggested that the government make it amply clear in the present law that MRP is the maximum price of a product to be sold in retail and charging anything above this is an offence.
Severe action will be initiated against levying of the Goods and Services Tax (GST) in addition to the maximum retail price (MRP) and cases will be registered against such an illegal practice, C V Anand, the state's civil supplies commissioner and legal metrology department's controller, said yesterday.
Minister of State for Road Transport and Highways, Shipping and Chemicals and Fertilisers Mansukh L Mandaviya said in a written reply in the Lok Sabha that the move followed amendments to the Legal Metrology (Packaged Commodities) Rules, 2011.
He said that the state government, being the implementing arm here, would strictly ensure that and strict action would be taken against the offenders.
HP said the maximum retail price (MRP) of MFPs has been increased by 8-10 per cent, while ink cartridges will be dearer by 12-15 per cent.
The companies have been given three months till September to clear the unsold stocks by stamping or printing the new retail price. Last week, the Goods and Services Tax (GST) on fertilisers was reduced to 5 per cent from 12 per cent in the interest of farmers.
Global retailers find the practice restrictive and the government is looking at aligning itself with international practices to attract investment.
The National Pharmaceutical Pricing Authority (NPPA) had notified the ceiling price of coronary stents at Rs 7,260 for bare metal stent and Rs 29,600 for drug-eluting ones.
The government has sought explanation from companies selling packaged mineral water over different MRPs of bottles for various places and directed that the sale price should be same at airports, hotels and malls.
The commerce and industry ministry is expected to discuss the sector specific issues with the departments and ministries concerned, sources said.
"Charging above MRP is violation of the law. But we still see at airports, multiplex and hotels, that packaged water is sold at more than the MRP. This needs to be stopped," Paswan said here.
According to its new draft tariff order, on which TRAI has sought suggestions, the broadcasters should also declare the maximum retail price (MRP) of their "a la carte" channels for their subscribers.
For drugs priced between Rs 20-50, the panel has proposal to cap the margin at 40 percent. It also recommended capping the margin at 50 percent for the drugs priced from Rs 2-20
"Currently, the sector is taxed at the normal rate for both excise and VAT and hence the overall duty burden is between 24% and 27%. As against this, if the GST rate for the standard rate of products for paints is 17-19%, there will be clearly an advantage," says Jayraj Sheth, Indirect Tax Partner, EY
At present, the country imports about 8 million tonnes of urea to meet the annual domestic demand of 30 million tonnes. India produces about 22 million tonnes of urea annually.
The government has no mechanism to check whether maximum retail price (MRP) fixed by companies for phosphastic and potassium fertilisers in the country is reasonable or not, Parliament was informed.
ICRA Research Service has come out with its report on Indian fertilizer sector. The research firm, expects the participants in the urea sector to continue to report steady returns in the near term with policy expectations increasingly pointing towards modified NPS-III (New Pricing Scheme-III).