What is the full form of MRP?
MRP: Maximum Retail Price
MRP stands for Maximum Retail Price. It is the highest price that can be charged for a product in the country. It is calculated by the manufacturer of a product. Along with the cost price it includes transportation cost and all the government taxes that are levied on that product. However, it can be sold below the MRP by the retailers. In India, all the products are labelled with the MRP to allow the customer to know the highest price at which a product can be sold or bought.
It prevents sellers from selling products at a price higher than the MRP. However, still, there are many instances when a product is sold higher than MRP, for example, in tourist places especially in the hill stations where products are not easily available, the retailers charge more than the MRP. The MRP was introduced in India in 1990 after the amendment of Standards of Weights and Measures Act, 1997.
Why MRP was criticised?
MRP is governed by the Legal Metrology Rules, PCR, 2011. As per this rule:
Besides this, the Consumer Good Act, 2006 also states that a consumer cannot be charged more than the MRP.
However, after the concept of GST was introduced the retailer started selling products above the MRP by saying that the price printed on the product is exclusive of the taxes. So, to prevent this practice new rules have been introduced after the implantation GST, these rules state that:
If a seller charges more than the MRP in the name of GST, the consumer can lodge a complaint against the seller in the anti-profiteering commissions.