Consumer council says no GST on MRP after discount

Retailers will not be able to levy GST after giving discount on MRP, like it was in the case of VAT, the Consumer Protection Council has decided.

Advocate Ajay Jagga, member, Consumer Protection Council (CPC), Chandigarh, raised the issue following which it was made part of the agenda in the meeting and passed on October 4. The public order in this regard is yet to follow, officials said.

The issue was raised that consumers are forced to pay extra tax by dealers (of mainly apparels and footwear dealers) during the “sale season”.

“The huge boards of sale are normally seen at most of the branded shops of garments and footwear during changing season and they are indulging in practice where they write on their sale board 40% off, VAT extra. By putting such boards they are virtually misleading the public concerning the price at which a product or products are, ordinarily sold. They are indulging in unfair trade practice,” Jagga said.

National Consumer Disputes Redressal Commission, New Delhi, in an order dated January 4, 2017, had said no tax can be charged in the name of discount on MRP. In state and District Consumer Disputes Redressal Forum the cases in this regard are still being settled with forum reiterating the same stand.

“Under the consumer laws the MRP is inclusive of GST, so whenever a discount is offered, it is on MRP, hence it is illegal to charge the GST, on the discounted price. The consumer forum and national commission has passed many orders terming the practice as unfair and imposed penalties but it is still continuing. The reason is that if 1% customer goes to court, they won’t mind paying penalty. Now the need is that Consumer Protection Council should issue ban orders and enforce the same through Section 144 of CrPC to save consumers,”.

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