Govt eases GST compliance, scraps mandatory ads and relabelling on price revisions

New Delhi: The government has rolled back compliance mandates under the revamped Goods and Services Tax (GST) regime, scrapping the requirement for mandatory newspaper advertisements on price revisions and making relabelling of existing stock voluntary. 

The move, announced late Thursday by the Ministry of Consumer Affairs, Food and Public Distribution, comes just days before the new GST rates take effect on September 22.

The updated circular, which supersedes a September 9 advisory, addresses widespread concerns from fast-moving consumer goods (FMCG) firms, pharmaceutical companies, and trade partners about the logistical and financial strain of immediate relabelling and public notifications. 

Previously, entities were required to advertise price adjustments in two newspapers, one in English and one in a regional language, while affixing revised maximum retail price (MRP) stickers on all pre-revision stock. 

Now, these steps are optional, with the government emphasising flexible corrections like stamping, stickering, or online printing anywhere on the package, as long as the original price remains visible.

"Manufacturers, packers, and importers shall take immediate measures to sensitise dealers, retailers, and consumers about revisions in GST rates through all possible channels of communication, including electronic, print, and social media," the circular states, shifting the onus to proactive outreach without prescriptive formats. 

This pragmatic pivot is expected to prevent supply chain disruptions, particularly for essentials like biscuits, namkeens, medicines, and construction materials, whose GST rates are being slashed to boost affordability amid festive season demand.

The relief extends to packaging timelines: Any unexhausted wrappers or materials produced before September 22 can now be used until March 31, 2026, or until stocks deplete, whichever comes first, after MRP corrections. 

For the pharmaceutical sector, the National Pharmaceutical Pricing Authority (NPPA) had already clarified on September 12 that relabelling drug packs is non-mandatory, provided full tax benefits are passed down the supply chain to avoid overpricing. This aligns with the broader GST Council's 56th meeting decisions, which simplified slabs to nil, 5%, 18%, 3% (for gold and silver), and a new 40% de-merit rate, rationalising taxes on over 200 items to ease household burdens and spur consumption.

Key changes include dropping GST on tractors, irrigation equipment, and sewing machines to 5%; shifting cement and many construction materials to 18% from 28%; and exempting gene therapy entirely. Pre-packaged namkeens and bhujia mixtures, popular during Navratri and Diwali, will also see reductions, making festive gifting more wallet-friendly.