The Ministry of Consumer Affairs, Food and Public Distribution has amended the Legal Metrology (Packaged Commodities) Rules, 2011 to make it mandatory for e-commerce companies to mention maximum retail price (MRP), expiry dates and country of origin of products available on the platforms. This will come into effect from January 1, 2018. These amended rules will apply to both e-commerce companies like BigBasket and Grofers, which stock inventory, and e-commerce marketplaces such as Amazon and Flipkart, which technically do not own the inventory, even though they provide sellers with storage space.
An E-Commerce entity shall ensure that the mandatory declarations as specified in sub-rule (1), except the month and year in which the commodity is manufactured or packed, shall be displayed on the digital and electronic network used for e-commerce transactions:
The mandatory declarations specified in sub-rule (1) include:
1. The name of the country of origin or manufacture or assembly in case of imported products shall be mentioned on the package.
2. If a package contains a commodity which may become unfit for human consumption after a period of time, the ‘best before or use by the date, month and year’ shall also be mentioned on the label.
(a) the expression “Best Before” means the date which signifies the end of the period under any stated storage conditions during which the product shall remain fully marketable and shall retain any specific qualities for which tacit or express claims have been made and beyond the date commodity may still be safe for consumption;
(b) the expression “Use by Date” means the date which signifies the end of the estimated period under any stated storage conditions after which the product shall not have the quality attributes normally expected by the consumers and after this date, the commodity should not be regarded as marketable.
3. After the words “the retail sale price of the package;”, the following words and figures shall be inserted, namely:-
“shall clearly indicate that it is the maximum retail price inclusive of all taxes and the price in rupees and paise be rounded off to the nearest rupee or 50 paise.”
In the marketplace model, the burden of ensuring accuracy of this information has been placed on the sellers/vendors. However, the e-commerce marketplace will still be liable of following the due diligence procedures before the product is delivered to the buyer.
Provided that in case of market place model of e-commerce, responsibility of the correctness of declarations shall lie with the manufacturer or seller or dealer or importer if,-
(a) the function of the e-commerce entity is limited to providing access to a communication system over which information made available by the manufacturer or seller or dealer or importer is transmitted or temporarily stored or hosted; or
(b) the entity does not-
(i) initiate the transmission;
(ii) select the receiver of the transmission; and
(iii) select or modify the information contained in the transmission;
(c) the entity observes due diligence while discharging its duty as an intermediary under the Information Technology Act, 2000 and also observes such other guidelines as the Central Government may prescribe in this behalf:
The Ministry has also clearly defined what they mean by e-commerce entity and the marketplace model:
E-commerce means buying and selling of goods and services including digital products over digital and electronic network;
E-commerce entity means a company incorporated under the Companies Act, 1956 or the companies Act, 2013 or a foreign company covered under clause (42) of section 2 of the Companies Act, 2013, or an office, branch or agency in India covered under sub-clause (ii) of clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999) owned or controlled by a person resident outside India and conducting e-commerce business;
Marketplace based model of e-commerce means providing of an information technology platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller;
Apparently, the decision to amend the rules was triggered by a discussion the Food Safety and Standards Authority of India had conducted on the online consumer engagement platform LocalCircles, where a number of grievances shared by consumers centered around expiry dates of products sold on e-commerce platforms, according to this The Times of India report.
Online platform for regulating medicine sales
Earlier this year, the Ministry of Health and Family Welfare had begun a public consultation regarding an electronic platform for regulating the sale of medicines in India. A revenue model had also been proposed for this portal: a small transaction fee of not more than 1% of total cost of medicines, subject to a ceiling of Rs 200 per prescription, to be paid online by pharmacies/ e-pharmacies/ wholesale /retail distributions, etc.”, as well as a “small amount of registration fee and renewal fee for manufacturers/ pharmacies/hospitals/ clinical establishments, etc.” More on this here. This development happened almost two years after the the Indian Pharmacist Association (IPA) wrote to the Drugs Controller General of India (DCGI) opposing online pharmacies in India.