MAIT, NASSCOM Should Take Up MRP Issue

It

is time that MAIT and Nasscom took up the MRP (Maximum Retail Price) issue with

the Central Government in a serious manner to bring about changes in the

applicable rules. Business of several partners has been hit because over-zealous

officials try to implement rules by the book and not by the spirit.

When originally formed, the MRP rules were primarily meant for local

manufacturers who were supposed to put the MRP labels on their products as they

rolled out of the factory to ensure that consumers were not duped by

businessmen.

But IT dealers face a peculiar problem with MRP rules because majority of

their products are imported. While local manufacturers can easily implement

these rules, it is the importers who face the music from MRP officials who say

that the MRP labels should be stuck on product packages in the customs

warehouse.

MRP officials, in fact, advice importers to ask their exporting parties in

respective countries to stick the India-relevant MRP labels on the cartons

before shipping the goods. Importers find this advice impractical and say that

it goes against the spirit of liberalization that the government advocates these

days.

What is at stake because of MRP rules is the secrecy code in trade. Going by

the rules, the MRP labels are supposed to have the complete postal address on

them. This is unacceptable to partners because it would like to maintain secrecy

about where a particular product came from. If end-users come to know the source

of products, they can directly get them from the original party at cheaper

rates.

Partners allege that MRP rules are being used more to harass them and extract

money rather than to guard the interests of consumers. There are instances when

partners have been penalized because a postal address was not given on the

label.

Again, partners have been pulled up because the officials thought that the

size of the label used was not right!

Of all the MRP rules, the one that needs immediate change is the one where

all the links in the channel chain are penalized even if the last link sells the

product without the MRP label. Partners find this provision illogical and want

it to be corrected in the current budget session of the Parliament. As per this

provision, if a product package did not contain the MRP label at a dealer’s

outlet, then officials can penalize not only the dealer, but also the reseller,

distributor and the importer.

MAIT and NASSCOM need to take the up MRP issue on a war-footing with the

finance ministry to remove those obnoxious rules that hinder the smooth running

of IT business.

sylvesterl@cmil.com