The Bureau of Indian Standards (BIS) Act, 2016 is a legislative framework introduced to improve the

quality, safety, and reliability of goods, services, and processes in India. It replaces the older BIS Act
of 1986 and designates BIS as the National Standards Body of India. This Act is aimed at protecting
consumers, promoting industrial development, and aligning Indian standards with global norms to
enhance trade and competitiveness.

Key Features of the BIS Act

1. Voluntary and Mandatory Standards:

The Act allows BIS to set voluntary standards for most products and processes. However, for critical
items that impact public health, safety, or the environment, compliance with standards is made
mandatory. For example, items like electrical equipment or packaged food require strict adherence
to BIS standards.

2. Hallmarking of Precious Metals:

Hallmarking ensures the quality and purity of precious metals like gold and silver. Under this Act,
hallmarking is mandatory, giving consumers confidence in the authenticity of their purchases.

3. Conformity Assessment:

The Act provides manufacturers with options to prove their products meet BIS standards. These
include third-party certification or self-declaration of conformity, which simplifies the compliance
process while ensuring quality.

4. Inspection and Enforcement:

BIS has the power to inspect manufacturing premises, test products, and seize substandard goods.
Violators of the Act are penalized, ensuring that businesses comply with quality standards.

5. Simplified Certification:

Certification schemes under BIS, like the ISI mark, make it easy for businesses to showcase their
product quality, which builds trust among consumers.

6. Consumer Protection:

The Act emphasizes consumer safety by addressing complaints, recalling defective products, and
ensuring fair practices in the market.

Major Activities of BIS

1. Formulation of Standards:

BIS develops national standards to ensure consistency and quality in goods, services, and systems.
These standards are designed considering public safety, health, and the environment.

2. Product Certification:

Products that meet BIS standards are awarded the ISI mark, which signifies reliability and safety. This
mark helps consumers identify high-quality products.
3. Hallmarking Services:

BIS offers hallmarking services to certify the purity of precious metals like gold and silver, protecting
consumers from fraud.

4. Laboratory Testing:

BIS operates advanced laboratories that test products for compliance with standards. This ensures
products are safe and reliable.

5. Training and Education:

BIS conducts training sessions and awareness programs for industries and consumers to educate
them about standards and certifications.

6. Consumer Advocacy:

BIS resolves consumer grievances and ensures businesses adhere to fair trade practices, enhancing
trust in the market.

7. International Collaboration:

To promote global trade, BIS aligns Indian standards with international norms, helping Indian
products compete in global markets.

8. Product Inspections:

BIS monitors the market to ensure products meet required standards and recalls unsafe or non-
compliant items.

Objectives of the BIS Act

1. Consumer Safety:

The Act ensures consumers receive high-quality, safe, and reliable products, protecting them from
substandard goods.

2. Support for Industries:

By providing clear standards and certification schemes, the Act helps industries improve production
quality and gain consumer trust.

3. Sustainability:

The Act promotes eco-friendly practices, encouraging businesses to adopt sustainable production
methods.

4. Global Standards:

Aligning Indian standards with international benchmarks helps Indian businesses compete globally,
boosting trade and exports.
Overview

The BIS Act, 2016, plays a vital role in India’s quality assurance system. It establishes a
comprehensive framework for certification, inspection, and hallmarking to protect consumers and
ensure that industries meet global quality standards. The Act balances consumer interests with
industrial growth, fostering trust in Indian products both domestically and internationally.

Conclusion: By ensuring quality, safety, and reliability, the BIS Act strengthens India's economy and
consumer protection. It is a critical tool for achieving a safe and competitive marketplace.

9.6 WORKING OF BIS

In order to support the activities of the product certification marks scheme, BIS has establis- hed
eight laboratories in the country to cater to the testing need of samples. The first BIS Central
laboratory was established at Sahibabad in 1962. Subsequently, four regional laborator- ies at
Mohali, Kolkata, Mumbai and Chennai and three branch office laboratories at Patna, Bangalore and
Guwahati were established. BIS laboratories have facilities for testing of products in the field of
chemical, microbiological, electrical and mechanical discipline.

In order to ensure that BIS laboratories are abreast with the latest developments at the International
level, the laboratories at Mumbai, Kolkata, Chennai, Mohali, and Sahibabad have been accredited by
the National Accreditation Board for Calibration and Testing Laboratories (NABL) as per the
international standard IS/ISO/IEC 17025.

Consumer Air and Sovereignty

BIS labs have complete test facilities for 374 Indian Standards and in addition, partial test facilities
are also available for 362 Indian Standards. During 2016, the BIS laboratories have tested 15 815
samples of various products covered under Certification. In addition, to support the Hallmarking
Scheme of gold and silver jewellery artefacts, the Gold Referral Assaying Laboratory at Chennai has
issued 2 559 test reports in the Year 2015-16.

9.7 CONSUMER GRIEVANCE REDRESSAL UNDER BIS

All complaints about BIS certified products or services provided by BIS can be sent to Public
Grievance Officers (PGOs) appointed by BIS at all locations where BIS offices exist. The PGOs after
necessary verification of supporting documents forward the complaint to Consumer Affairs
Department (CAD) at New Delhi for recording of the complaint centrally.

Complaints can be lodged in writing, online on BIS website www.bls.gov.in or through Mobile
Application CARE, available on the BIS website/Google Playstore. For all recorded complaints against
ISI marked products or services relating to its activities such as Product Certification, Standard
Formulation, Management System Certification, Sale of Standards and Publications, Training etc,
redressal is done in a time bound manner.

Monitoring of complaints is done centrally by Consumer Affairs Department. In case, complainant is

not satisfied with the redressal of the complaint, he/she may prefer an appeal before Additional
Director General of BIS. BIS receives complaints or grievances on products certified by BIS, services
rendered by BIS and procedural aspects of BIS through mail, hard copy, web portal and mobile app
which are analysed, recorded, investigated, redressed and disposed. Purther, BIS also receives
consumer grievances through CPGRAMS Portal Actions are taken on the CPGRAMS and the action
taken report is uploaded for information of the consumer. During the period April to December 2017,
52 Product Quality complaints, 113 Miscellaneous Complaints, 147 CPGRAMS grievances have been
received. During this period 55 Product Quality complaints, 46 Miscellaneous complaints and 137
CPGRAMS grievances have been disposed.

OBLIGATIONS OF MANUFACTURER/SELLERS

OBLIGATION OF MANUFACTURER

PENALTY OF CONTRAVENTION refer page 9.18

Enforcement: The BIS Standard Mark (ISI Mark/Hallmark) is a mark of quality. Consumers

as well as the organized purchasers prefer ISI marked products. During the period, April - December
2017, BIS carried out 87 successful search and seizures all over the country on the firms which were
indulging in the misuse of BIS Standard mark, based on 102 complaints received through various
sources. BIS issued press releases pertaining to the enforcement raids for giving wide publicity with
the intention to create awareness araong the consumers about the unscrupulous manufacturers
misusing the BIS Standard Mark.

Recently addressing the media the Union Minister of Consumer Affairs Mr. Ram Vilas Paswan said
that the hallmarking of gold jewellery would become mandatory at one go across the nation from
January 15, 2020, and will not be implemented in phases, as was expected earlier However, the
Centre has given a year's time to comply with the new norm, which means that while the notification
will be issued by January 15 next year, jewellers would I be given time until January 2021, after which
it would be mandatory to seil hallmarked ornaments.

The BIS (Bureau of Indian standards) Act 2016 has provisions under Sections 14 and 16 for making
hallmarking of mandatory by the Central Government. This will make it compulsory for all jewellers
selling gold ornaments and artefacts to register with BIS and sell only hallmarked products. The draft
Quality Control Order for mandatory hallmarking of gold jewellery and artefacts was issued on
October 10, 2019, and offered for concnents from stakeholders for a period of 60 days.

8 CONSUMER RIGHTS UNDER CPA

1. Right to Safety:

Consumers have the right to be protected against products and services that are harmful to their
health, safety, or well-being. This right ensures that products, such as food, cosmetics, and
appliances, meet specific safety standards. If a product is defective or unsafe, it can lead to harm to
the consumer. For instance, if a toy for children is made with toxic materials or an electronic
appliance has faulty wiring, the consumer has the right to seek compensation or demand a
replacement. The CPA holds manufacturers and service providers responsible for any harm caused by
unsafe products.

2. Right to Information:

Consumers have the right to receive accurate, clear, and sufficient information about the products or
services they are purchasing. This includes details about the ingredients, instructions for use, price,
manufacturing date, expiry date, and any potential risks associated with the product. The
information must be presented in a way that is easy to understand, so consumers can make informed
choices. For example, when purchasing food items, consumers should be able to easily see whether
the product contains allergens or preservatives.

3. Right to Choose:

Consumers should have access to a variety of goods and services and not be forced to settle for a
single option due to lack of competition. This right ensures that businesses do not monopolize the
market or force consumers into buying products they do not need. If consumers are given limited
choices, they might be overcharged or forced to buy substandard products. The right to choose also
includes the ability to freely shop in different markets or from various sellers, ensuring fair
competition.

4. Right to be Heard:

This right ensures that consumers have the ability to express their grievances, complaints, and
suggestions. If a consumer faces a problem with a product or service, they should be able to report it
to the seller or manufacturer and have their concerns addressed. Consumer forums, complaint
boards, and consumer protection bodies, like the Consumer Redressal Forums, allow consumers to
file complaints and get solutions. This right empowers consumers to challenge unfair practices and
seek proper resolution.

5. Right to Redress:

Consumers have the right to seek compensation or a remedy if they are wronged by a product or
service. This could include a refund, repair, replacement, or compensation for damages. For instance,
if a customer buys a defective washing machine, they have the right to demand either a replacement
or repair at no extra cost. The right to redress also helps consumers seek financial compensation for
harm caused by faulty products or misleading services. In severe cases, they may even seek legal
action for any injury or loss suffered.

6. Right to Consumer Education:

This right refers to the need for consumers to be informed and educated about their rights,
responsibilities, and how to protect themselves from exploitation. Consumer education can be
through awareness campaigns, advertisements, or educational materials that explain how consumers
can identify good products, recognize fraudulent practices, and know where to report issues. This
right ensures that consumers are empowered to make smart choices, identify scams, and avoid
unfair treatment in the marketplace.

7. Right to Service:

Consumers are entitled to receive services that are of a reasonable standard and quality. Whether it
is healthcare, education, or utility services, consumers must be assured that the service provider will
offer efficient, timely, and fair services. For example, a hotel should provide clean rooms and
courteous staff, while a mobile service provider should ensure the services are uninterrupted and of
high quality. If services are subpar, consumers can file complaints and seek appropriate redress under
the CPA.

8. Right to Protection from Unfair Trade Practices:

This right protects consumers from dishonest business practices such as false advertising, misleading
claims, deceptive labeling, and fraudulent activities. Companies cannot misrepresent their products
or services to deceive consumers into buying them. For instance, a product cannot be advertised as
“100% organic” if it contains harmful chemicals. Similarly, misleading pricing strategies like “fake
discounts” or “hidden charges” are also covered under this right. The CPA ensures that consumers
are not exploited by businesses using unfair methods to increase their profits.

In summary, the Consumer Protection Act aims to safeguard consumers by giving them various rights
to ensure fairness, transparency, and safety in the marketplace. It provides the tools to hold
businesses accountable, ensuring that consumers are treated with respect and fairness.

Explanation of UNGCP 2015

The UNGCP 2015 serves as a global framework to guide countries in creating consumer protection
laws. These guidelines help ensure that consumers’ rights are upheld, businesses follow fair
practices, and consumers can confidently engage in the marketplace. The 2015 version focuses on
modern challenges like e-commerce, consumer education, and protecting vulnerable groups.

8 Objectives of UNGCP 2015

1. Promote the Protection of Consumer Rights

This objective emphasizes the need to protect consumers from harmful or unsafe products and
services. It ensures that businesses follow ethical practices and provide goods and services that do
not jeopardize the health, safety, or financial security of consumers.

2. Promote Consumer Education

Consumers should be educated about their rights and responsibilities, helping them understand how
to make informed choices. This includes understanding product risks, knowing how to compare
goods, and being aware of their rights to complaint mechanisms.

3. Facilitate Access to Redress

If a consumer faces a problem (like a defective product or unfair service), they should be able to
access a fair system for resolving disputes. This objective ensures that consumers can seek
compensation or a remedy if they are wronged, such as through refunds, repairs, or replacements.

4. Encourage Sustainable Consumption

This objective encourages consumers to make environmentally responsible decisions. It promotes

the idea of consuming products and services that are not only good for consumers but also
sustainable for the environment, helping reduce waste and promoting eco-friendly alternatives.

5. Support Economic Development

A fair marketplace where consumers are protected leads to greater consumer confidence, which in
turn supports economic growth. When consumers trust that their rights will be protected, they are
more likely to spend and participate in the economy.

6. Ensure Availability of Consumer Goods and Services

Consumers should have access to a wide variety of products and services, promoting choice and
competition in the market. This also helps avoid monopolistic practices where consumers are forced
to buy limited or overpriced goods.
7. Improve International Cooperation

Consumer protection is not limited to one country; it has global dimensions. This objective
encourages nations to collaborate on cross-border consumer issues like online fraud, international
trade, and global product safety standards.

8. Protect Vulnerable Consumers

Certain groups, such as children, the elderly, and low-income individuals, are at higher risk of
exploitation. This objective ensures that these vulnerable consumers are specifically protected from
harmful business practices or exploitation

Scope of UNGCP 2015

The scope of the UNGCP 2015 includes all aspects that affect consumer welfare, including:

1. Product Safety

Ensures that products available in the market are safe for consumers. Manufacturers are required to
meet safety standards, and unsafe products should be recalled or removed from the market.

2. Consumer Education

Encouraging governments and businesses to educate consumers about their rights, product risks,
and how to make responsible choices.

3. Access to Fair Market Practices

Consumers must have access to a diverse range of products and services without being forced into
monopolistic or unfair conditions. This supports competition and prevents exploitation.

4. Dispute Resolution

Consumers should have access to simple, effective, and accessible mechanisms to resolve disputes
with businesses. This includes setting up consumer protection councils and forums where issues can
be addressed fairly.

5. Global Consumer Issues

Consumer protection should be coordinated across borders. This involves international agreements
to address issues like e-commerce fraud, unsafe imported products, and consumer rights in global
markets.

11 Principles of UNGCP 2015

1. Consumer Health and Safety

Consumers must be protected from products or services that could harm their health or safety. For
example, regulations ensure that food, electronics, and pharmaceuticals meet safety standards to
prevent injuries or illnesses.
2. Access to Information

Consumers should have access to clear, accurate, and easily understandable information about
products or services, such as pricing, ingredients, potential risks, and usage instructions.

3. Access to Justice

Consumers need effective, accessible legal mechanisms to resolve disputes. This includes consumer
forums and complaint mechanisms where consumers can seek redress without facing high legal
costs.

4. Right to Choose

Consumers should have access to a range of choices in the marketplace. This encourages competition
and ensures that businesses provide alternatives, preventing monopolies from controlling the
market.

5. Right to Redress

Consumers who face harm, such as from defective products or misleading services, must have the
right to seek compensation. This could be through refunds, repairs, or replacement of products.

6. Fair Advertising and Labeling

Businesses must advertise their products honestly. Misleading advertisements or deceptive product
labels (such as false claims of "organic" or "natural") are prohibited to ensure consumers can trust
the information provided.

7. Protection of Vulnerable Consumers

Some groups, like children and the elderly, are more susceptible to exploitation. Special laws and
practices are put in place to protect these vulnerable consumers from misleading practices and
unsafe products.

8. Consumer Education and Awareness

Governments and businesses should inform consumers about their rights and responsibilities.
Educated consumers are less likely to fall victim to scams or make poor purchasing decisions.

9. Participation in Market Decisions

Consumers should be involved in the development of policies that affect them. This could include
consultations on laws and regulations regarding consumer rights, product safety, and advertising
standards.

10. Environmental Protection

Encouraging responsible consumption that reduces waste and supports environmental sustainability.
This principle calls for businesses to consider the environmental impact of their products and for
consumers to make eco-friendly choices.
11. International Cooperation

Countries should work together to address global consumer issues like cross-border fraud and
ensuring that international products meet safety standards. Cooperation between governments
helps solve shared consumer protection challenges.

Salient Features of the Consumer Protection Act (CPA)

1. Consumer Rights

The CPA guarantees fundamental consumer rights, including the right to safety, the right to
information, the right to choose, and the right to redress when harmed by a product or service.

2. Consumer Dispute Redressal Forums

It establishes mechanisms at district, state, and national levels for consumers to resolve complaints
efficiently, ensuring quick and fair resolutions.

3. Unfair Trade Practices

The CPA prohibits businesses from using deceptive advertising, misleading claims, or fraudulent
practices to exploit consumers.

4. Product Liability

The CPA holds manufacturers, service providers, and sellers accountable for defective products or
services that harm consumers, ensuring they can claim compensation.

5. Consumer Protection Councils

These councils work to raise awareness about consumer rights, investigate consumer grievances, and
ensure that consumer issues are addressed at various levels.

6. E-Commerce Regulations

With the rise of online shopping, the CPA ensures that digital transactions are secure, and
consumers' rights are protected in the online marketplace.

7. Compensation and Remedies

Consumers can seek compensation for damages or losses caused by defective goods, misleading
services, or unfair practices, ensuring justice and fairness.

In summary, the UNGCP 2015 provides a global framework for consumer protection, while the
Consumer Protection Act (CPA) in countries like India ensures that consumer rights are actively
enforced. Both aim to create a fair, safe, and transparent marketplace.

FAIR PRICE

In the context of consumer affairs, a fair price is essential for protecting the interests of consumers
while ensuring that businesses can remain profitable. A fair price is one that reflects the true value of
a product or service based on factors like production costs, market demand, and competition. It
ensures that consumers are not overcharged for products or services, and that businesses are not
exploiting their customers. From a consumer rights perspective, a fair price should be transparent
and justifiable, with clear information about what the price is based on. For instance, businesses
should not engage in deceptive pricing practices, such as hiding extra fees or inflating prices
artificially. Consumer protection laws play a key role in regulating prices to prevent price gouging,
especially during emergencies, and ensure that consumers are not subjected to unfair pricing.
Moreover, a fair price helps promote healthy competition in the market, which benefits both
consumers and businesses. Consumers are more likely to make informed purchasing decisions when
they feel the price is reasonable and aligned with the value of the product or service. In summary,
ensuring fair pricing is a key aspect of consumer affairs as it guarantees fairness, transparency, and
protection for consumers while maintaining a competitive and sustainable market environment.

Concept of Wholesale

Wholesale refers to the process of buying goods in bulk directly from manufacturers or suppliers at
lower prices and selling them to retailers or other businesses. Wholesalers usually do not sell directly
to consumers. They act as intermediaries who buy large quantities of goods and then distribute them
to retailers or businesses for resale. Wholesalers usually handle larger volumes and offer a wide
range of products at discounted rates due to bulk purchasing.

The wholesale business model is beneficial for businesses that need to stock products in large
quantities but do not have the capacity or need to manage the logistics of buying from individual
manufacturers themselves. Wholesalers often make profits through volume sales rather than high
prices for individual items.

Concept of Retail

Retail refers to the sale of goods and services directly to consumers. Retailers buy products from
wholesalers or manufacturers in bulk and sell them in smaller quantities at higher prices. Retail
businesses, such as supermarkets, clothing stores, and online shops, focus on meeting consumer
demand. Retailers play a crucial role in ensuring that products reach individual consumers in
manageable quantities.

Retail businesses typically provide added services like customer support, product displays, and
sometimes after-sales services. Retail prices are generally higher because they account for expenses
like store rent, staffing, and marketing, which are not as prevalent in wholesale.

Differences Between Wholesale and Retail (in Tabular Form)

Prices in Wholesale vs. Retail (12 Points)

1. Price Difference: Wholesale prices are generally much lower than retail prices because wholesalers
sell in large quantities, while retailers sell smaller amounts.

2. Bulk Buying: Wholesale prices are lower because wholesalers buy in bulk, getting discounts from
manufacturers, whereas retailers buy in smaller quantities and thus pay more.

3. Profit Margins: Retailers often have higher profit margins on individual items because of additional
costs like rent, labor, and customer service.

4. Sales Strategy: Wholesalers focus on high-volume sales, while retailers focus on higher prices per
unit and low-volume sales.

5. Discounts: Wholesalers often get product discounts based on bulk purchases, which are not
available to retailers buying in smaller quantities.
6. Operating Costs: Retail prices need to cover operating costs like store maintenance, marketing,
and employee salaries, which are generally higher than the costs wholesalers incur.

7. Cost to Consumer: Consumers generally pay more in retail for the same products that they would
purchase at a lower price through wholesale distributors.

8. Inventory Handling: Retailers often have to manage a wider variety of products, which increases
costs, while wholesalers typically deal with a more limited product range.

9. Packaging: Wholesale products are often sold in bulk packaging or large units, while retail products
are individually packaged and marketed for consumer use.

10. Product Availability: Retail prices reflect demand and availability in local stores, while wholesale
prices depend on large-scale supply.

11. Price Transparency: Retail prices are usually fixed and visible to consumers, while wholesale
prices may require negotiations, especially when purchasing in large quantities.

12. Market Influence: Retail pricing is influenced by consumer preferences and demand in specific
locations, while wholesale pricing is primarily based on market supply and demand for bulk goods.

MPR (Maximum Retail Price) Under Legal Metrology Act (LMA)

MPR stands for Maximum Retail Price, which refers to the highest price at which a product can be
sold to the consumer. This price is printed on the packaging of the product, and it includes all taxes,
such as GST (Goods and Services Tax). Under the Legal Metrology Act (LMA), the concept of MRP
ensures that consumers are not overcharged, as it prevents sellers from selling a product at a price
higher than the MRP.

The Legal Metrology Act (LMA) was introduced to regulate weights, measures, and packaging to
ensure that consumers are protected against unfair trade practices. The law mandates that products
sold in India must display the MRP, which includes all taxes, such as GST, to ensure transparency and
fairness in pricing. Sellers and manufacturers are obligated to print the MRP on the product’s
packaging, which must not exceed the printed price.

Salient Features of Legal Metrology Rules

The Legal Metrology Rules were framed under the Legal Metrology Act to provide detailed guidelines
and regulations on the measurement, sale, and packaging of goods. Here are the key features:

1. Mandatory MRP Display: All packaged products must display the MRP on the packaging, which
includes the price at which the product is sold and the taxes that are applicable.

2. Measurement Standards: The rules establish standard measurements for weight, volume, and
other physical parameters to ensure accurate measurement when goods are sold. This helps
consumers get the quantity they pay for.

3. Packaging Standards: The rules define the format and size of the label, ensuring that the MRP,
manufacturing date, expiry date, and other information are clearly visible and easy to read.
4. Prohibition of Overcharging: The rules prohibit the sale of products at a price above the MRP. This
helps prevent businesses from exploiting consumers by overpricing goods.

5. Inspection and Enforcement: Authorized officers can inspect the packaging of goods, and the
product’s MRP, weights, and measures to ensure that businesses are following the rules. If violations
are found, they can impose fines or penalties.

6. Consumer Protection: Legal Metrology Rules ensure that consumers are not deceived by
misleading packaging, wrong measurements, or unfair pricing practices, thus protecting their rights.

Seeking Redressal Under LMA

Consumers who feel that they have been overcharged or if there are violations of the Legal
Metrology Act can seek redressal through various mechanisms:

1. Complaint to Authorities: Consumers can file complaints with the Department of Legal Metrology,
which oversees the enforcement of the act. The department is responsible for investigating violations
and ensuring compliance with the law.

2. Consumer Courts: If consumers are not satisfied with the response from the legal metrology
authorities, they can take their complaints to Consumer Forums or Consumer Courts, where they can
seek compensation or redressal for unfair practices.

3. Civil Suit: In some cases, consumers may also opt to file a civil suit in the appropriate court if they
believe that they have suffered significant financial harm due to violations of the MRP rule.

The Legal Metrology Act gives consumers the right to report unfair pricing, misleading labeling, or
faulty measurements, helping them protect their interests in the market.

Overcharging Can Fetch Penalty

Under the Legal Metrology Act, businesses that overcharge customers by selling products above the
MRP or violate packaging and labeling rules can face penalties. The penalties for overcharging or
violating the law can include:

1. Monetary Penalties: The seller may be fined a specified amount for each violation, which can vary
depending on the severity of the offense.

2. Imprisonment: In severe cases, such as repeated violations or cases that involve fraud, the violator
may face imprisonment for a certain period, in addition to monetary fines.

3. Seizure of Goods: In extreme cases, authorities may seize the goods that are being sold in violation
of the MRP rule.

These penalties are designed to deter businesses from engaging in unfair practices, thus ensuring
that consumers are protected from being overcharged.

GST and MRP

GST or Goods and Services Tax is a tax levied on the sale of goods and services in India. Under the
Legal Metrology Act, the MRP of a product includes the GST. This means that when the MRP is
printed on a product’s packaging, it must include the total price, which is the cost of the product plus
any applicable GST.
For example, if a product costs ₹100 and the GST rate is 18%, the total MRP should be ₹118. The
seller cannot charge more than this ₹118, as it includes both the cost of the product and the taxes.
The inclusion of GST in the MRP helps ensure that consumers are aware of the total cost, including
the taxes, at the time of purchase.

GST is Included in MRP

As per the Legal Metrology Act, the MRP printed on the packaging of a product must include GST.
This means that the price visible to consumers is the final price they need to pay, with all taxes,
including GST, already factored in. This ensures transparency and prevents hidden charges from
being added at the point of sale.

When businesses display the MRP, they cannot charge customers extra for GST separately. The GST is
already included in the price shown on the product. This rule helps consumers avoid confusion
regarding the final price and ensures they are not misled by unexpected tax charges.

Remedies for Overcharging

If a consumer finds that they have been charged more than the MRP for a product, they have several
remedies available under the Legal Metrology Act:

1. Complaint to Legal Metrology Department: Consumers can file a complaint with the Department
of Legal Metrology, which will investigate the matter and impose fines or penalties on businesses
that overcharge.

2. Consumer Court: If the consumer does not receive a satisfactory response from the authorities,
they can take the matter to a Consumer Court, where they can seek compensation or refunds for
overcharging.

3. Refund: Consumers can request a refund from the retailer or manufacturer if they have been
overcharged.

Supreme Court Exemption to Hotels Regarding MRP (December 2017)

In December 2017, the Supreme Court of India granted an exemption to hotels and restaurants from
the MRP rule. The ruling stated that hotels and restaurants were not required to display the MRP on
the packaging of food and beverages served to customers, as these are considered services and not
packaged products.

This exemption was granted because food and beverages served in hotels and restaurants are
treated as part of the service they provide, and not as a retail sale. This means that hotels and
restaurants can charge customers for food and beverages based on the cost of the service, rather
than being bound by the MRP rule. However, this exemption does not apply to packaged goods like
bottled water, snacks, or any packaged products sold in hotels, which are still required to follow MRP
regulations.

In summary, the Legal Metrology Act and its rules ensure fair pricing, transparency, and consumer
protection against overcharging, with provisions to seek redressal for unfair practices.

Here is a detailed explanation of each point about MRP as a deceptive price:

1. Misleading MRP:

Sometimes, businesses print an MRP that is higher than the actual cost of the product or its market
value. This can mislead consumers into thinking the product is worth more than it actually is. If the
MRP doesn't reflect the true value of the product, consumers may end up paying more than they
should, which is unfair.

2. Hidden Costs:

In some cases, the MRP might not include additional costs like taxes, packaging, or extra fees. This
can confuse consumers, who may believe that the price they see on the label is the final amount
they need to pay. When additional costs are added at the point of sale, it becomes deceptive
because the total price isn’t transparent from the start.

3. Inflated MRP:

To make discounts or promotions look more attractive, some sellers may artificially inflate the MRP.
For example, if a product is normally sold for ₹200, the seller may mark the MRP as ₹300 to make it
appear as if the consumer is getting a 50% discount, even though the actual price is lower. This
practice deceives consumers into thinking they’re getting a better deal than they really are.

4. False Discount Claims:

Retailers often advertise products as being on "sale," claiming huge discounts on the MRP. However,
they may have initially increased the MRP or set it much higher than the product's actual value. This
makes the discount seem larger than it truly is. Consumers are then tricked into believing they are
getting a significant discount, when in fact, the price reduction is minimal or non-existent.

5. Legal Consequences:

Deceptive pricing practices, such as inflating the MRP or hiding additional costs, are illegal under
consumer protection laws. Laws like the Legal Metrology Act in India ensure that businesses provide
clear and accurate pricing. If a business is found to be practicing deceptive pricing, they can face
penalties, fines, or even legal action. This aims to protect consumers from being misled by dishonest
pricing.

6. Consumer Protection:

The goal of the rules governing MRP is to ensure that consumers are not misled and are aware of the
full price of products. By requiring accurate labeling, including the inclusion of taxes and clear
pricing, these laws safeguard consumer interests. Consumers should be able to trust that the price
they see on the label is what they will pay at the checkout without hidden surprises or inflated prices