Govt eases compliance for packaged goods firms ahead of GST rate changes

Mumbai: The ministry of consumer affairs has moved to ease compliance requirements for packaged goods companies ahead of the roll-out of the recent goods and services tax (GST) rate revisions.

In a notification issued on Thursday, the Department of Consumer Affairs has issued provisions that allow “voluntary” use of revised price stickers on goods along with waiving off of the requirement for manufacturers and importers to publish revised prices in two newspapers.

The changes come after representations from industry and trade associations seeking simpler procedures to transition to revised prices. Revised GST rates are set to take effect on 22 September.

According to the circular issued on Thursday, manufacturers, packers and importers may choose to voluntarily affix revised price stickers on unsold packaged goods manufactured before 22 September 2025. This applies to stocks lying with them or their representatives, as long as the original price declaration on the packaging remains unobstructed. However, the ministry clarified that existing rules do not make it mandatory to affix such revised stickers, effectively leaving the decision to the companies.

Additionally, the Centre has waived the requirement for manufacturers and importers to publish revised prices in two newspapers. Instead, companies have been directed to communicate the updated prices only to wholesale dealers, retailers, and other stakeholders through circulars.

Makers of fast-moving consumer goods were specifically worried about extending the usage of packaging material.

The government has clarified that any packaging or wrapper printed with the old maximum retail price (MRP) that was produced before the GST rate revision can continue to be used until 31 March 2026, or until existing stock is exhausted, whichever comes earlier. Companies, however, will be required to ensure that the correct revised MRP is communicated and displayed through stickers, stamping, or online printing at any place on the package.

The fast-moving consumer goods (FMCG) industry has been batting for a smooth transition.

That's because most companies deal with hundreds and lakhs of stock keeping units daily. Revising and releasing stocks in the market is a time-consuming task, most companies had said.

Thursday's notification is a positive move for the industry.

“The market is ready with the new prices; this notification eases the burden on the manufacturers since the statutory requirements have now come down. We see this as net net positive. Companies have also shown the willingness to pass on trader offers and benefits to the consumers,” said Dharyashil Patil national president, All India Consumer Products Distributors Federation.

“The government’s Next Generation GST reforms have been transformative for both consumers and businesses, improving ease of living and ease of doing business. The GST rate rationalization across various sectors will surely bring relief to consumers through enhanced affordability, boosting consumption, and strengthening investments, growth and employment," B. Sumant, executive director, ITC Ltd, said. "At ITC, we will pass on the full benefits of the GST rationalization across applicable products. Our FMCG businesses span a large range of categories, products and SKUs, which reach almost 7 million outlets across the nation. We have initiated an extensive exercise of informing all trade partners about the price revisions of our products across categories so that the commensurate benefits arising out of revised GST rates are passed on to the end consumer. Necessary steps are also being taken to notify consumers about the ensuing benefits.”

Companies had made several recommendations to the government seeking relaxation of rules.

The circular further clarifies that declaring revised unit sale prices on unsold stock or unused packaging material is not mandatory. Manufacturers and their representatives may declare revised prices voluntarily, but there is no compulsion to do so.

The notification comes days after the GST revisions were first announced. Industry associations had warned of possible disruptions in distribution and retail chains.

“The government’s latest clarification has come as a major relief for industry and trade," said Manoj Mishra, partner and tax controversy management leader, Grant Thornton Bharat.

"By making re-labelling of unsold stock optional, extending the use of existing packaging material till 31 March 2026, and doing away with the earlier requirement of publishing revised MRPs in newspapers, compliance has been simplified significantly. Instead, manufacturers and importers can now inform trade channels and authorities through circulars—a far more practical and cost-efficient approach. This balanced framework reduces compliance costs and operational challenges, while still ensuring transparency for consumers at the retail level. It is a welcome move that acknowledges on-ground realities, offering businesses greater flexibility without compromising consumer protection," he added.