Everything you wanted to know about Labelling and compliance under GST Vis-à-vis- Legal Metrology (Packaged Commodities) Rules, 2011

Preface:
Recent GST rate revisions, notably the GST Council’s 56th meeting in September 2025, have prompted crucial changes to labelling regulations for businesses in India. GST Changes and Packaging Act Requirements India's labelling regulations for pre-packaged commodities are primarily governed by the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, under the Food Safety and Standards Authority of India (FSSAI) and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Recent changes in GST rates have introduced specific provisions regarding Maximum Retail Price (MRP) declaration on unsold stock

However, business is required to comply the requirements as stipulated by the Department of Consumer Affairs Legal Metrology (Packaged Commodities) Rules, 2011 also.

These articles covers detailed discussion on compliances a business is require complying under GST vis-a vis other relevant Acts as applicable and will also discuss relaxations under the Legal Metrology (Packaged Commodities) Rules, 2011, to ease compliance burdens related to Maximum Retail Price (MRP) revisions on unsold stock

Effective from September 22, 2025, the impact on compliances in view of recent changes on ongoing compliance requirements  on MRP declaration under the packaging act in India.

1. What's the procedure for revising MRP on unsold stock after GST changes?

• To revise the Maximum Retail Price (MRP) on unsold stock after GST rate changes, effective September 22, 2025, the Department of Consumer Affairs has provided the following advisory:
  • Temporary Relaxation: The Department of Consumer Affairs has allowed businesses to revise MRP on unsold stock affected by GST changes.
  • Revised MRP can be declared by stamping, affixing a sticker, or online printing
  • The original MRP must remain visible, and the revised price must be prominently displayed
  • Any increase in MRP should not exceed the increase in tax due to GST. If GST is reduced, the revised MRP must reflect this reduction
  • Manufacturers and importers should inform dealers, retailers, and consumers about revised GST rates through various media. Revised price lists should be sent to wholesale dealers and retailers, with copies also provided to the Director, Legal Metrology (Central) and State/UT Controllers
  • Existing packaging with old MRP can be used until March 31, 2026, or until stocks are exhausted, provided the corrected MRP is applied
  • While not mandatory, manufacturers/packers/importers can voluntarily affix stickers or declare the revised unit sale price on pre-packaged commodities.
  • These guidelines aim to simplify compliance for businesses and ensure that consumers benefit from any GST reductions. Failing to pass on GST rate reductions will be considered an unfair trade practice.
  • Conditions: The revised price must strictly reflect the change in GST rate (increase or decrease)
  • Communication: Companies must communicate the revised price to dealers, retailers, and legal metrology authorities through circulars. The requirement to publish revised MRPs in newspapers has been waived
  • Consumer Benefit: For GST rate reductions, the consumer should benefit from the lower price
  • Specific Exemption for Medicines and Medical Devices: The government has waived the mandatory re-labelling of existing stock for these products. Manufacturers must issue revised price lists and ensure retailers comply with the new rates

2. Relaxation in labelling rules due to GST rate changes (September 2025)

To help businesses manage inventory during the GST rate changes, the government has provided key relaxations for unsold stock manufactured before September 22, 2025. 

What has changed

• Voluntary price stickers: Affixing revised MRP stickers on unsold packages is now voluntary. Manufacturers, packers, and importers can choose to affix stickers, stamp, or use online printing to reflect the revised price, if the original MRP remains clearly visible.
• Waiver of newspaper advertisement: The mandatory requirement under Rule 18(3) to publish advertisements in two newspapers for price changes has been waived. Businesses must now send circulars directly to their wholesale dealers and retailers and keep copies for record, with copies endorsed to the central and state Legal Metrology authorities.
• Extended use of old packaging material: The deadline for using existing packaging material or wrappers has been extended until March 31, 2026, or until the stock is exhausted, whichever is earlier. This allows businesses more time to deplete old inventory.
• Voluntary unit sale price declaration: Manufacturers may voluntarily declare the revised unit sale price on unsold pre-packaged commodities or unused wrappers. 

It is worth to note here compliance requirements under the Legal Metrology Act

Despite the temporary relaxations for GST-related price changes, all businesses must continue to comply with the mandatory provisions of the Legal Metrology (Packaged Commodities) Rules, 2011

• Mandatory labelling declarations for all packaged commodities:
• Name and address: The name and address of the manufacturer, packer, or importer must be clearly declared.
• Common name: The common or generic name of the commodity must be stated
• Net quantity: The net quantity of the commodity, in standard units of weight, measure, or number, must be declared
• Month and year: The month and year of manufacture or pre-packing must be specified. Month and year of manufacture or packing. For products with shelf life exceeding three months, month and year suffice; for shorter shelf life, the full date is needed.
• Maximum Retail Price (MRP): The MRP, inclusive of all taxes, must be clearly indicated
• Consumer care details: Contact information for consumer complaints, such as a phone number or email, must be provided
• Country of origin: In the case of imported goods, the country of origin must be declared
• Language requirements: The label must contain information in English or Hindi, and optionally in other languages
• Net Quantity: Must be declared in standard units of weights and measurements (metric).
• Expiry/Best Before Date: Month and year by which the product is best consumed.
• Ingredient List: Ingredients listed in descending order of weight or volume.
• Nutritional Information: Nutritional facts per 100g/ml or serving, including energy, protein, carbohydrates (with sugar specified), and fat content
• Veg/Non-Veg Symbols: Mandatory green symbol for vegetarian and brown symbol for non-vegetarian products
• Batch/Lot Number: For traceability

Key Labelling Requirements Under Packaging Act

All pre-packaged food products must comply with specific labelling requirements

1. Language: Labels must be in English or Hindi (Devnagari script). Other languages are permissible but should not contradict the information provided in English or Hindi.
2. Importer Details (for imported goods): Name and address of the importer
3. Product Identification: Generic or common name of the commodity and trade name/description.
4. Net Quantity: Must be declared in standard units of weights and measurements (metric).
5. Manufacturing/Packing Date: Month and year of manufacture or packing. For products with shelf life exceeding three months, month and year suffice; for shorter shelf life, the full date is needed
6. Expiry/Best Before Date: Month and year by which the product is best consumed
7. MRP: Maximum Retail Sales Price, inclusive of all taxes
8. Ingredient List: Ingredients listed in descending order of weight or volume
9. Nutritional Information: Nutritional facts per 100g/ml or serving, including energy, protein, carbohydrates (with sugar specified), and fat content
10. Veg/Non-Veg Symbols: Mandatory green symbol for vegetarian and brown symbol for non-vegetarian products
11. Manufacturer/Packer Details: Name and complete address
12. Country of Origin: Mandatory for imported foods
13. Batch/Lot Number: For traceability

1. GST on 'pre-packaged and labelled' goods

It's important to understand the distinction between 'branded' and 'pre-packaged and labelled' goods regarding GST applicability, a change that took effect in July 2022

• GST on pre-packaged and labelled goods: GST now applies to specific goods, including food items like pulses, cereals, and flour, when they are sold in 'pre-packaged and labelled' packs
• Definition of pre-packaged commodity: A pre-packaged commodity is a product placed in a package, with a pre-determined quantity, without the purchaser being present

• Applicability throughout the supply chain: GST is applicable when a distributor or manufacturer sells pre-packaged and labelled goods to a retailer

Exemptions:

• Single packages of over 25 kg or 25 litters are exempt.
• Goods sold loosely by a retailer, not as a packaged commodity, are not subject to this GST levy
• Commodities supplied to industrial or institutional consumers are also excluded from the 'pre-packaged and labelled' definition for GST purposes.

How to ensure compliance - To stay compliant with both the Legal Metrology Act and recent GST changes, businesses should take the following steps:

• Register with the Legal Metrology Department: Manufacturers, packers, and importers must register with the appropriate authority.
• Ensure labelling accuracy: All mandatory declarations on pre-packaged goods must be accurate, legible, and non-misleading.
• Maintain documentation: Keep copies of all circulars sent to dealers and retailers regarding GST-related price revisions, endorsed by the relevant Legal Metrology authorities.
• Communicate price changes: Actively inform stakeholders and consumers about price changes through various communication channels, as required by the relaxation guidelines.
• Stay updated on amendments: Regularly check for new amendments to the Legal Metrology (Packaged Commodities) Rules, 2011, as they are frequently updated to address evolving market conditions and technologies.

Important Considerations

• Compliance with both general labelling rules and specific GST-related provisions is essential to avoid penalties and consumer trust issues
• Consumers are advised to double-check MRPs at the point of sale to ensure they receive the benefit of any GST reductions

What penalties are there for incorrect labelling or MRP declaration?

Incorrect labelling and MRP declarations in India can lead to serious penalties under both the Legal Metrology Act and the Food Safety and Standards (FSS) Act, depending on the type of commodity. Penalties can range from monetary fines to imprisonment for repeat or serious offenses

Penalties under the Legal Metrology Act, 2009

The Legal Metrology Act governs the accuracy of weight, measure, and MRP declarations for all packaged commodities, including food and non-food items.

For incorrect MRP declaration and non-standard packages

• First offense: A fine of up to Rs, 25,000.
• Second offense: A fine of up to Rs. 50,000
• Subsequent offenses: A fine of at least Rs. 50,000, which can extend to Rs.1 lakh, or imprisonment for up to one year, or both.
• Overcharging: Charging a price higher than the MRP can lead to a fine of up to Rs. 25,000 for the first offense and up to Rs. 1 lakh or one year of imprisonment for subsequent offenses

For other non-compliance issue

• False declarations: Providing false information can result in a fine of up to Rs. 5,000 and, for subsequent offenses, up to one year of imprisonment
• Quoting non-standard units: Using non-standard units for packaging can lead to a fine of up to Rs. 10,000

Penalties under the Food Safety and Standards (FSS) Act, 2006

The FSS Act applies to packaged food and includes provisions for misbranding and misleading advertisements

For misbranded food (Section 52)

• Penalty: Up to Rs. 3 lakh
• Action by adjudicating officer: The officer can order corrective action or the destruction of the misbranded food product

• For misleading advertisements (Section 53)- Penalty: Up to Rs. 10 lakh for publishing or being a party to a misleading advertisement that gives a false description or guarantee about the food's nature, quality, or substance.
• For unsafe food (Section 59): Incorrect labelling resulting in unsafe food carries severe penalties based on the harm caused. This includes fines and imprisonment, with the most serious cases involving death potentially leading to life imprisonment and a fine of at least Rs. 10 lakh
• For contraventions with no specific penalty: A general penalty of up to Rs. 2 lakh applies for violations without a specific penalty listed
• In any proceeding the fact that a label or advertisement relating to any article of food in respect of which the contravention is alleged to have been committed contained an accurate statement of the composition of the food shall not preclude the court from finding that the contravention was committed

Consequences of non-compliance- In addition to fines and imprisonment, non-compliance can lead to consumer complaints, product recalls, reputational damage, confiscation of goods, and license suspension or cancellation

Punishment for false information

• If a person, in connection with a requirement or direction under this Act, provides any information or produces any document that the person knows is false or misleading, he shall be punishable with imprisonment for a term which may extend to three months and with fine which may extend to two lakh rupees.