Legal Metrology (Packaged Commodities) Amendment Rules, 2017

The Amendment comes at a time when e-commerce has taken off in a big way in India and will only strengthen consumer protection for online transactions

There are many things we use in our daily life as a matter of habit without realizing the importance of their measurements. To overcome the barriers of uncertainty in respect of authenticity in transactions, "The Standards of Weights and Measures Act, 1939" came into force. In view of rapid advancement of science & technology and globalization of economies, there had been a vast evolution in weighing and measuring techniques which extended the scope of weights & measures in other fields, and hence, the Legal Metrology Act, 2009 repeals and replaces the Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.

Recent Amendment

The Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 (Rules) prescribe the mandatory technical and legal requirements relating to standards of weights and measures for goods which are sold or distributed in India. On June 29, 2017, Shri Ram Vilas Paswan, the Minister of Consumer Affairs, Food and Public Distribution (hereinafter referred to as 'The Ministry of Consumer Affairs), approved the amendments to the Legal Metrology (Packaged Commodities) Rules, 2011.

To enhance the protection offered to consumers while balancing the requirement of the ease of doing business, an amendment was introduced to the aforesaid rules recently. Moreover, the Ministry of Consumer Affairs took another step in the direction of protecting consumers' interests by notifying an amendment in Metrology (Packaged Commodities) Rules, 2017. The Amendment will come into force from January 1, 2018.

Addition of important definitions

The new Rules include addition of some vital definitions which were not provided earlier under Legal Metrology Rules, 2011.

• Consumer – as is defined under Section 2(1)(d) of the Consumer Protection Act, 1986.
• "E-commerce" means buying and selling of goods and services, including digital products, over Regulatory Insights digital and electronic networks.
• "Marketplace-based model of e-commerce" means an e-commerce entity providing an information technology platform on a digital and electronic network to act as a facilitator between buyer and seller.
• "Retail sale price" means the maximum price at which the commodity in packaged form may be sold to the consumer, inclusive of all taxes.
• "Institutional consumer" means the institution that buys packaged commodities bearing a declaration "not for retail sale" directly from the manufacturer or importer or from the wholesale dealer for use by that institution and not for commercial purposes or trade.

Enhancing visibility

• The size of letters and numerals for making declarations on the pre-packaged commodities has been increased with a view to enable consumers to read the same easily.
• The Amendments would double the display size of quantity, MRP on small packets, while on bigger ones, it would be increased by 1.5 times.
• The width of the numeral or letter shall not be less than one third of its height, except in case of numeral "1" and letters (i), (I) and (l).
• The net quantity checking has adopted a more scientific approach, with introduction of e-coding.
• Bar Code/QR Coding is allowed on voluntary basis.
• Provisions regarding declarations on Food Products have been harmonized with labeling regulations under the Food Safety & Standards Act, 2006.

Medical devices to mandatorily mention MRP amongst other declarations

• The government has notified 22 medical devices which qualify as "drugs" under the Drugs and Cosmetics Act, 1940. So far, it was not mandatory for such medical devices to make mandatory declarations. It was seen that consumers at large were facing various problems regarding the pricing of the devices.
• Keeping this aspect in mind, now medical devices such as stents, valve syringes, orthopedic implants, and operation tools all shall prevail under these Rules and it is mandatory to display the MRP and other such declarations as required under Amendments.

One product, One price - No dual Maximum Retail Prices (MRP)

• It is often observed that manufacturers take advantage of dual pricing policy on pre–packaged commodities where higher sale prices are fixed on pre-packaged commodities, which are then sent to various malls, airports, and cinema halls across the city.
• The Amendment provides a big relief to such dual pricing policy which bars sellers to have different MRPs on the same, identical pre-packed commodities unless it is expressly allowed under any law of the country.
• This major Amendment will undoubtedly have positive

  impact on various sectors of consumers who are suffering due to the dual pricing policy. It is intended to benefit consumers at large, which will sort the issues and impacts arising due to dual pricing policy.

Application to e-commerce platforms

• E-commerce websites will be under the ambit of the said Rules. It is mandatory for e-commerce websites to comply with the new Rules regarding pre-packaged commodities. The Rules will be applicable to e-commerce companies and e-commerce market places which do not have their own inventory but provide a medium to carry on transactions hassle-free between sellers and consumers.
• Mandatory compliance is required on pre-packaged commodities sold on e-commerce platforms regarding the name and address of the manufacturer, retail sale price, name of the commodity, net content and retail sale price, and other such declarations as required under the Rules.
• The Amendment will apply to all commodities except packages containing food products that will fall under the Food Safety and Standards regulations and that of drugs and cosmetics that will be subject to the provisions of the Drugs and Cosmetics Act, 1940.
• E-commerce websites will now require to ensure that all such mandatory declarations as specified in Rule 4(1), with the exception of month and year in which the commodity is packed, shall be displayed on the digital and electronic network used for e-commerce transactions.
• If a package contains a commodity which may become unfit for human consumption after a period of time, such items have to be prominently displayed on the packet "Best Before" or "use by date, month and year".

Applicability of IT Act

• The Amendment also draws reference to the intermediary regulations under the IT Act applicable to a market place model of e-commerce. The e-commerce entity has to observe due diligence while discharging its duty as an intermediary under the IT Act.
• This means that the e-commerce entity has to publish the rules and regulations, privacy policy, and user agreement for access or usage of the intermediary's computer resource by any person. Such rules and regulations have to list the categories of information which, if posted online, could be considered as illegal, such as information that infringes any patent, trademark, copyright, or other proprietary rights, is blasphemous, obscene, pornographic, pedophilic, libellous, invasive of another's privacy, hateful, or racial, etc.

Conclusion

The Rules were framed to regulate pre-packaged commodities such that they comply with certain mandatory labeling requirements and overcharging of prices of such commodities is prevented. However, it was silent about products sold through e-commerce platforms. These Rules will bring transparency and fair dealings which would benefit the consumers at large. The Amendment comes in at a time when e-commerce has taken off in a big way in India and strengthens consumer protection for online transactions. While there will be an additional burden on the manufacturer, retailer, dealer, and importer to ensure compliance with the Amendment while selling their goods through e-commerce platforms, the Amendment will increase transparency and turn out to be beneficial to the consumers in the long run.

Disclaimer

– Ms. Yashada Kale is a Legal Trainee in Wockhardt Limited. The views expressed above are of her own and not those of the Company.