The Central Government of India, in the exercise of its power given under the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011, introduced vital amendments to Legal Metrology (Packaged Commodities) Rules, especially concerning e-commerce marketplaces. In this write-up, we will discuss the applicability of Legal Metrology on E-commerce Marketplaces.
What is E-Commerce?
Before we discuss the applicability of Legal Metrology on E-commerce Marketplaces lets, understand the concept of e-commerce. E-commerce means buying & selling of products and services comprising digital products over digital & electronic networks.
An E-commerce entity means a company registered under the Companies Act, 2013 or 1956 or a Foreign Company under the Clause (42)of Section 2 of the Companies Act, 2013 or an office, agency, or branch in India covered under sub-clause (ii) of Clause (v) of Section 2 of FEMA, 1999 controlled by an individual resident outside Indian and conducting e-commerce business.
Declaration required on the Portal – Legal Metrology on E-commerce Marketplaces
Amendment Rules (under Rule 10) require e-commerce entities to show certain declarations on electronic & digital networks used for e-commerce transactions. These declarations comprise the name & address of the manufacturer, name of the country of origin, common product’s name, net quantity, best before or use by date, MRP, dimensions of the commodity & such other declarations given in the Rules of Legal Metrology on E-commerce Marketplaces/Entities.
As an outcome of this amendment, e-commerce markets or entities are now required to mandatorily make declarations, identical to the declarations made on the product’s label, for all applicable pre-packed commodities sold on their portal.
A pre-packaged commodity means a commodity that, without the buyer being present, is placed in a package of whatever nature, whether sealed or not, so that product contained therein has a pre-defined quantity. Considering that almost all products sold on the digital & electronic network are packed without the purchaser being present during packing, products sold by e-commerce entities would be pre-packaged commodities and will directly fall within the scope/purview of the Act & the Rules.
The following products are released from the provisions of the amendment rules under Legal Metrology on E-commerce Marketplaces:
- Packages comprising food articles, which are controlled by identical provisions that are present in the Food Safety & Standard Act, 2006 & the rules made thereunder;
- Packages of commodities comprising a quantity of more than 25 L or 25 Kg;
- Packaged commodities meant for industrial consumers/institutional consumers;
- Fertiliser, agricultural farm, and cement products are sold in bags above 50 kgs.
Correctness of the Declarations – Legal Metrology on E-commerce Marketplaces
The responsibility for the correctness of the declarations made on e-commerce websites lies with the seller, dealer, importer, or manufacturer as applicable and not the e-commerce entity, provided:
Observations – Legal Metrology on E-commerce Marketplaces
- The function of an e-commerce entity is limited to facilitating access to a communication system over which details or information made available by the manufacturer, seller, importer, or dealer is transmitted or temporarily hosted or stored;
- The e-commerce entity observes due diligence while releasing its duty as an intermediary under the IT Act, 2000 & observes guidelines issued by the Central Government of India;
- The e-commerce entity doesn’t initiate the transmission, select the receiver of the transmission & select or modify the information contained in the transmission.
While we are of the estimation that the above amendments will need e-commerce entities to make exhaustive changes to their portals to make sure that relevant declarations as required under the Act & Rules are duly declared, we believe that the same is vital as customers purchasing products from e-commerce websites don’t have access to the information and declarations made on the label of pre-packed commodities at the time of purchase.
Similar obligations were executed on e-commerce food business operators vide Guidelines for Operations issued by the FSSAI on Feb 02, 2017, effective the same day. With the Amendment Rules comes into action, e-commerce entities comprising entities that sell products both using brick & mortar stores & online website will now need to make pertinent declarations on their websites for all pre-packed commodities comprising clothing, food packages, electronic items, etc.
It’s vital to note that while some products or items don’t qualify as pre-packaged commodities while sold in a brick & mortar store, the same products or items may qualify as pre-packaged commodities when sold online. For instance, rice or sugar taken from a nigger pack, packed in small quantities in front of consumers and sold to the customer in a brick or mortar grocery store doesn’t qualify as a pre-packaged commodity.
Therefore, declarations are needed under the Act & Rules need not be printed on the said products. However, a similar product, i.e., sugar or rice has taken form a larger pack in the current case, will qualify as pre-packaged commodities when sold online as the product is packed in the customer’s absence. Therefore, online grocery stores that don’t make declarations on both the label of their package & on their online portal will now be needed to make declarations on both the product’s label and on their online website.
E-commerce markets or entities are now required to mandatorily make declarations, identical to the declarations made on the product’s label, for all applicable pre-packed commodities sold on their portal.
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