In a significant move aimed at enhancing consumer transparency, the Indian government has issued a new mandate requiring all pan masala packages to clearly display their Retail Sale Price (RSP). This rule will apply uniformly, regardless of the pack's size or weight.
Key Details of the New Mandate
The Department of Consumer Affairs has amended the Legal Metrology (Packaged Commodities) Rules, 2011, through a notification numbered GSR 881(E). According to an official statement, this amendment will come into full force on February 1, 2026. From this date, all manufacturers, packers, and importers of pan masala must ensure strict compliance with the new pricing declaration norms.
A crucial change introduced by this amendment is the removal of a previous exemption. Earlier, small packs of pan masala weighing 10 grams or less were not required to carry certain declarations, including the retail price. The new proviso under Rule 26(a) specifically for pan masala now mandates that even these smallest packs must print the RSP and all other declarations stipulated by the 2011 rules.
Impact on Consumer Protection and Pricing
The government states that this step is designed to strengthen consumer protection by ensuring transparent pricing information is available across all pack sizes. This move is expected to:
- Prevent misleading or deceptive pricing practices, especially on smaller, low-cost packs.
- Empower consumers to make better-informed purchasing decisions by having clear price visibility.
- Create a level playing field in the market by standardizing declaration requirements.
Implications for GST Implementation
Beyond consumer rights, the amendment has significant fiscal implications. By making the declaration of RSP mandatory on all packages, the government aims to facilitate the seamless implementation of the RSP-based Goods and Services Tax (GST) levy on pan masala.
This alignment is expected to enable more straightforward enforcement of decisions made by the GST Council. It will also ensure proper tax assessment and consistent revenue collection from the sale of pan masala, covering even the smallest unit sizes sold in the market. The move closes a potential loophole where tax calculation could be ambiguous on packs without a declared maximum retail price.
Industry stakeholders have until the start of February 2026 to adjust their packaging and labeling processes to adhere to these updated Legal Metrology Rules.
