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E-commerce rules 2020 for Consumer Protection under Legal Metrology

Legal Metrology Act, 2009 was enacted to establish standards for weights and measures and enforce them to regulate trade and commerce with respect to the following:

  • Weights
  • Measures
  • Goods distributed or sold by weight, measure, or number specified goods which are in Pre-packaged form or sale in packaging form. 

Legal Metrology plays a vital role in the protection of consumer interest from the malpractices of providing under-weighed and under-measured goods. Thus, Legal Metrology Act sets the standards for measurements and corresponding measurement instruments.

After the Covid-19 pandemic, online purchases from e-commerce portals like Flipkart, Amazon, etc. increased and became a preferred choice for consumers. The protection of their rights became necessary and therefore certain amendments were done in Legal Metrology (Packaged Commodities) Rules, 2011 (herein referred to as ‘LMPC’) that became applicable from 1st January 2018 to establish e-commerce rules to cover various such portals within its ambit and ensure protection to the consumers.

Before proceeding with the new e-commerce rules, an understanding of certain terms needs to be obtained. As per the Legal Metrology (Packaged Commodities) Rules, 2011,

Rule 2(bd): ‘E-commerce’ means buying and selling of goods and services including digital products over digital and electronic networks

Rule 2(be): ‘E-commerce Establishment’ means a company incorporated under the Companies Act, 1956 of the Companies Act, 2013 or a foreign company covered under Section 2(42) of the Companies Act, 2013 or an office, branch, or agency in India covered under Section 2(v)(ii) of the Foreign Exchange Management Act, 1999 owned or controlled by a person resident outside India and conducting e-commerce in India.

What became mandatory for e-commerce portals?

After the amendment, certain practices were mandated for e-commerce portals non-compliance of which may attract penalties. Here’s what became mandatory for e-commerce portals:

Declarations on Web Portal

Rule 10, after amendment, requires e-commerce companies to display certain declarations, same as in the packaged commodities, on the digital or electronic network. This is due to the fact that the purchaser is not present physically when packing is done. Thus, pre-packaged commodities also include the products that are sold by e-commerce portals.  

The declarations include:

  • Generic/Common name of the product
  • Name and address of the manufacturer
  • Product’s Country of Origin
  • Best before date
  • MRP (mentioning the words “Inclusive of all taxes”)
  • Dimensions of the commodity or product
  • Net quantity
  • Other details as required under Legal Metrology Act

However, certain products are exempted from complying with the above requirements that include:

  • Food packages are governed by similar provisions under Food Safety and Standards Act, 2006 and the rules thereunder.
  • Packaged commodities for industrial or institutional consumers.
  • Packages containing commodities of quantities more than 25 litres or 25 kilograms
  • Fertilizers, agricultural farm produce, and cement are sold in bags above 50 kgs.

The onus of correctness of the above declarations lies with the seller/dealer/manufacturer/importer provided the e-commerce entity-

  • performs the limited function of providing seller/dealer/manufacturer/importer with access to communication system on which information can be transmitted or stored/hosted temporarily
  • has neither initiated the transmission nor chooses the recipient of the transmission or chose or modify the information available in the transmission
  • while discharging duties as an intermediary, observes due diligence under the Information Technology Act, 2000 and follows the Central Government guidelines.

Thus, it limits the responsibilities of the e-commerce, who acts merely as an intermediary for declaration of details provided by the seller/dealer/manufacturer/importer.

Penal Provision

Legal Metrology is one of the stringent laws that are prone to be often misunderstood and leave many into paying hefty penalties due to non-compliances, these Non-compliance might lead to the penalties up-to.

  • Rs. 25000/- per director plus company for a first offense,  
  • Rs. 50,000/- for second and 
  • For the subsequent offense with imprisonment of up to 6 months, or both

An e-commerce entity to whom Legal Metrology Act and the Rules made thereunder applies may be liable to investigations and checks by relevant authorities to ensure compliance with the provisions of the act and rules made thereunder. This can include verifying measurements, weights, and inspection of records and documents. Any non-compliance, found during the investigation and checks, may attract penal provisions as well.
 

Bottom Line

The Government took a great step by covering the e-commerce entities within the ambit of Legal Metrology Act, 2009 and related rules to enhance consumer protection and make the sellers as well the e-commerce entities accountable for discrepancies and contraventions. Apart from Legal Metrology Act, 2009, certain provisions were also incorporated vide Consumer Protection (E-Commerce) Rules, 2020 and making amendments in Information Technology Act, 2000 to regulate the e-commerce marketplace.

In case of any assistance, feel free to contact the Legal Metrology consultants for expert advisory and obtain Legal Metrology E-commerce Certificate.
 

 

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