Our Bureau
Mumbai
Even though the GST revamp looks fruitful with the new reforms, it will provide several challenges in the coming festive season on the ground level. With the new tax reforms and shuffling of various items in different tax slabs, the restructuring and retagging of prices will have to be done no matter whether the taxes inflate or deflate the prices.
On one hand there will be a lot of goods that might be benefiting from these changes while on the other many will be taking an impact after the hike in their pricings. But no matter what they will have to produce their products with new tags and stickers with revised prices. For products that have a shorter life-span like 15-20 days at most won’t be suffering that much. However, the manufactures will have to compensate the retailers for the differences in product pricing post tax rate adjustments if these are to be priced lower.
In the upcoming festive season, the sector that will be in a heap of challenges is the fashion retailers. Kumar Rajagopalan, CEO of Retailers Association of India (RAI) has stated that retagging merchandise at the helm of the festive season will be a difficult task and bring many challenges for them.
The RAI has reached out to the department of legal metrology in order to seek their permission that would allow retailers to update the MRPs on unsold goods that were manufactured, packed or imported before September 22nd. They have asked for permission because as per the current norms of Legal Metrology Packaged Commodities Rules 2011, the retailers cannot alter MRP after the product is manufactured or imported without formal approval.
The issue on the hand for companies is to advise a plan on how to compensate the retailers and the stakeholders. As finished goods are still in the pipeline that will be released with old pricing which companies would be looking to sell before September 22nd.
