The introduction of GST 2.0 marks a major shift in India’s indirect taxation regime. With effect from 1st April 2025, the statutory anti-profiteering authority under Section 171 of the CGST Act, 2017 ceased to exist. This means businesses are no longer directly monitored by the National Anti-profiteering Authority (NAA) or Competition Commission of India (CCI) in relation to profiteering complaints.

However, compliance obligations have not vanished. Instead, the emphasis has shifted to enforcement under:

• Consumer Protection Act, 2019 – covering unfair trade practices and misleading advertisements.
• Competition Act, 2002 – addressing abuse of dominance or cartelization.
• Legal Metrology (Packaged Commodities) Rules, 2011 – mandating MRP revision and proper labelling on packaged goods when GST rates change.

Additionally, DoCA Circular dated 09.09.2025 provides specific transitional guidance requiring manufacturers, packers, and importers to revise MRPs of unsold stock whenever GST rates are revised under GST 2.0.

Judicial precedents, notably Reckitt Benckiser India Pvt. Ltd. v. UOI [Delhi HC, 2024], reaffirm that consumers must receive the full benefit of GST reductions without unjust enrichment to businesses.

The following detailed FAQs address common issues faced by businesses and compliance officers.

FAQs with Expanded Explanations

Q1. Is immediate revision of MRP required after a GST rate change?

Answer: Yes, immediate revision is mandatory.

• Legal Basis: Rule 6(3) of the Legal Metrology (Packaged Commodities) Rules, 2011 requires that if tax rates (such as GST) are revised, the manufacturer/packer/importer must revise the MRP printed on unsold stock.
• How to Revise: The revised MRP must be displayed by stamping, affixing stickers, or reprinting on each package. Both the old and new MRP must remain visible.
• Advertising Requirement: As per the DoCA Circular dated 09.09.2025, the revised prices must also be advertised in two daily newspapers, ensuring public awareness.
• Penalty Risk: Failure to revise may amount to an “unfair trade practice” under Consumer Protection Act, 2019, and could also attract fines under the Legal Metrology Act, 2009.

Q2. Are there sector-specific rules for sensitive products (e.g., pharmaceuticals)?

Answer: Yes. Certain sectors, particularly pharmaceuticals and medical devices, are governed by special regulations.

• Drugs (Prices Control) Order, 2013 (DPCO): Any reduction in GST rate must be immediately reflected in the revised ceiling price or MRP notified by the National Pharmaceutical Pricing Authority (NPPA).
• Judicial Support: In Glaxo SmithKline Pharmaceuticals Ltd. v. UOI (SC), it was held that reduced prices must apply uniformly across all batches.
• Practical Note: Unlike FMCG goods, pharma products cannot use stock clearance discounts or transitional relaxations – NPPA requires instant implementation of revised prices.

Q3. What if old MRP stock remains unsold after a GST rate reduction?

Answer:

• For unsold inventory, businesses must affix a revised MRP sticker on each product package.
• Both the old MRP and the new MRP should be clearly visible to avoid confusion or misleading practices.
• The lower MRP (post-revision) is what the consumer will ultimately pay.
• This requirement ensures price transparency and compliance with Rule 6(3), Legal Metrology (Packaged Commodities) Rules, 2011.

Q4. Is upward revision of MRP permissible when GST rates increase?

Answer: Yes, upward revision is permissible, but with restrictions.

• Proportionate Increase Only: The increase in MRP should only reflect the increase in GST rate, not arbitrary price hikes.
• Compliance Requirements: Businesses must:
  • Affix new MRP stickers on unsold stock.
  • Keep the old MRP visible.
  • Advertise the revised MRP in newspapers.
• Prohibition of Profiteering: If businesses increase prices beyond the tax burden, it may amount to profiteering or unfair trade practice under the Consumer Protection Act, 2019.

Q5. What happens if benefits are not passed on to consumers after NAA/CCI ceases?

Answer: Even though NAA/CCI ceased operations w.e.f. 01.04.2025, compliance obligations still remain:

• Section 171(2), CGST Act, 2017 remains in force, mandating passing of benefits of tax reduction.
• Consumer Protection Act, 2019 – complaints may be filed for unfair trade practices.
• Competition Act, 2002 – complaints may arise for abuse of dominance or unjust enrichment.
  Thus, businesses remain exposed to alternate enforcement mechanisms.

Q6. Is there judicial precedent on passing GST benefits?

Answer: Yes.

• In Reckitt Benckiser India Pvt. Ltd. v. UOI [Delhi HC, 2024], the court held:
  • Consumers must receive the entire benefit of GST rate reduction.
  • Businesses cannot claim operational expenses or advertising costs as justification for non-compliance.
• This case reinforces that profit margins cannot be inflated to absorb tax benefits.

Q7. Do GST 2.0 rate revisions affect services with fixed-price annual contracts?

Answer: Yes.

• As per Section 13 of the CGST Act, 2017 (time of supply for services), tax rate applicable is the one prevailing at the time of supply, not at the time of signing the contract.
• Thus, even in long-term fixed-price contracts (e.g., annual maintenance, lease rentals, etc.), invoices raised after a rate cut must reflect the reduced tax rate.
• Courts have clarified that private contracts cannot override statutory tax laws.

Q8. Can e-commerce platforms be held liable for non-revised MRPs displayed online?

Answer: Yes.

• Under Consumer Protection (E-Commerce) Rules, 2020, platforms must ensure accurate display of MRPs.
• If suppliers fail to update MRPs, and platforms knowingly allow misleading MRPs, platforms may face joint liability.
• Liability is stronger if platforms control the listing (inventory model), but weaker under pure marketplace models.

Q9. How should businesses deal with transitional stock where labels cannot be modified?

Answer:

• Rule 33, Legal Metrology (Packaged Commodities) Rules, 2011 allows sale of stock with dual pricing declaration (old and new MRPs).
• As per DoCA Circular dated 09.09.2025, this relaxation applies until 31st December 2025.
• Principle: The consumer must always be charged the lower of the two MRPs.
• Supported by SC ruling in Glaxo SmithKline Pharmaceuticals Ltd. v. UOI (2013).