Significance of MRP

Significance of MRP

All goods in India that are packaged, ranging from beverages to electronics, are marked with a price that is the maximum limit at which the product can be sold. This is known as MRP, or Maximum Retail Price. It is the maximum allowable cost to consumers. Nowadays we can see that prices of various goods are sometimes set by the manufacturers arbitrarily. This is where the MRP comes useful, as the consumers then know if the seller is charging the correct amount of taxes and not exploiting the consumers on the basis of unreasonable prices, and the seller cannot charge an amount from them which is greater than the MRP.

As per the Consumer Goods Act 2006, so that consumers cannot be asked for a price greater than the MRP. Those guidelines are as follows:

1.       Consumer goods are those goods which are meant for resale, and for consumption and use by consumers.

2.       Cost of production refers to that cost which is incurred by the manufacturer directly or indirectly on the production of goods.

3.       Printing refers to printing the cost of production and the Maximum Retail Price on the product at a visible area, either in English, Hindi or the local language of the area where the product is sold.

4.       Maximum Retail Price is the maximum price which the seller/manufacturer can command from the customer. It includes all the taxes that are to be paid to the government, and no consumer can be forced to pay an amount greater than the MRP. The legislation has made it compulsory for the producers to mention the cost of production and MRP on the package of the product, so that agents/dealers don’t overcharge the buyers on any grounds.

As of 2003, hotels are not subject to the MRP act. Packed goods at a hotel can be sold at the property’s discretion.

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