Is it legal to charge more than MRP?

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No, a retailer cannot any product above the printed MRP. It is the rule that a shopkeeper cannot sell above the MRP fixed by the manufacturer. Though a person can sell the product at a lesser price than that of the MRP or also known as the discounted price but cannot sell above it under normal circumstances. But it is not completely illegal to sell any product above MRP. There are certain exceptions to this concept, let’s have a look:

 

What is MRP?

MRP is the price calculated by the manufacturer and set as the highest price at which the product can be sold. The MRP is inclusive of all the factors in the cost of production, transportation, taxes and keeping the margin as well. It is also mandatory to have MRP on all the products.

The manufacturer takes in great pain to estimate the MRP, it is not tyrannical price set by them, but rather they conducted full-fledged research before deciding the price. They conduct the market survey, obtain feedback from the retailer, wholesalers, distributors, and even some consumers. They tally these research work with the cost they incur at each stage from production to distribution. And try to keep the price as competitive as possible.   

 

Legal Metrology Act, 2009

This act is applicable all over India. the Act got the president’s assent on 13^th January 2010 and came into effect on 1^st April 2011. It covers provisions regarding standards of Weights and Measures Act 1976 and standard of Weight and Measures (Enforcement) Act 1985. This Act comes under the Ministry of Consumer Affairs. The Act is important as it regulates the weighment and measurement methods for ensuring public guarantee. Each manufacturer has to get a license from the comptroller of the Legal metrology Department. He is also the authority who gives a grant of registration to packer/manufacturer/packaged commodities. He checks that the necessary information is given on the product as prescribed by the government like manufacturer information and the products information etc. even as per the Package Commodity Rule 2007, it is illegal to sell any product above MRP (but these rules are not applicable on g]good weight above 25 kg or 25 litres).  

Any retailer who is selling the product above the MRP would be liable to pay fine or imprisonment or both. No seller can put the new sticker of MRP upon the printed MRP of the product. Under section 36 of the Legal Metrology Act, any person distributing or delivering any pre-packaged commodity that does not conform to declarations on the package shall be punished with fine up to Rs. 25,000 for the first offence, for the second offence the fine will rise upto Rs. 50,000 and for the subsequent offences the fine may go up to Rs. 1,00,000 with imprisonment for 1 year or both.

 

Cinema house and Hotels charging over MRP is legal?

On  12^th December 2017, the Supreme Court of India on hearing the petition by the Federation of Hotels and Restaurants Associations of India (FHRAI) ruled that the hotels and the restaurants can sell the products above the MRP. The reasoning given by the court is that the restaurant and the hotels are not making a simple sale like any retailer, they are providing extra services for their customers like the ambience and cutlery etc. the court has directed that the Legal Metrology Act, would not be applicable upon them and they would not be prosecuted for selling products at a higher price than the MRP.     

This judgement of the Supreme Court is unwelcomed by the government as they think that this judgement will pave the way for tax evasion and loss in revenue generated by the government. It was the central government who filed an appeal to the Supreme Court in 2015 to prosecute the hotels and the restaurants for overcharging.

Consumer Affair Minister Ram Vilas Paswan in 2017 said that no manufacturer can sell the product at two different prices. Double MRP will be a crime.

Multiplex, Cinema Theatres have been warned many a time and many raids have also been conducted by the Legal Metrology Department for charging the products above MRP. It is illegal for them to sell products above MRP. There are a number of cinema house booked for charging above MRP.

 

Airport Stores

The government has forbidden the companies for selling products at a higher price than the MRP even at the Airport. The directive is a part of the Legal Metrology (Packaged Commodities) Rules, 2011 which came into effect on 1^st January 2018. This long-time duration was actually termed as ‘breathing period’ provided to the manufacturers to get complied with the rules. The department has worked on enhancing consumer protection. No manufacturer can sell products at a dual price unless allowed by law. This rule though won’t be applicable to restraint s and hotels nut rest everywhere in India it is applicable.

Hospitals and chemist

They also came under the ambit of this law. Earlier there were no price tags affix upon the various medical products like the syringe, stent valves, orthopaedic implants and tools for operating. So that the hospital staff and the chemist do not get the blank cheque of making money by way of exploitation. The customer has the right to know the price of the product they purchase. Consumers can now complain about the default in the medical devices if appears as well to the redressal forum.

The issue arises on the products directly imported from foreign countries. They do not mostly have the MRP on them as the manufacturer says that it is impossible for them to sell the products directly to the consumers and hence tries to sell it through hospitals. But still legally speaking, it is illegal in India to sell products without MRP under the Legal Metrology Act.       

 

Products without MRP label if charged with a higher price

India faces the problem of question of free-market concept, which is that if the demand rises, the prices shall also be increased. In 2018 a PIL was filed in the Bombay High Court praying that the food products in the cinema houses should be sold at regular prices. The matter is still sub judice. The profit made over the cinema ticket price is way less than what is made over the food and beverages (as many claims it is more than 70%). The strategy they adopt to lure the customers to buy it by way of unusual attractive smell that would tempt the people and induce craving. The reasoning given most of the times is that the cinema houses too provide with the quality ambience which makes them not inclusive of the ordinary sale criteria like any other retailer.      

 

Redressal

One can lodge the complaint by calling the toll-free number or by sending an SMS or by way of email to the Legal Metrology Department. Each state has their different number provided for the redressal purpose. One can go the website and get the phone number or the mailing address.  

Then we have the courts system (NCDRC)especially made for the speedy disposal of the case at 3 levels. It is a quasi-judicial body set up under the Consumer Protection Act 1986. The commission is presently headed by a retired judge of Supreme Court of India Jts. R. K. Agrawal. District Consumer Dispute Redressal Forum, State Consumer Dispute Redressal Forum and National Consumer Dispute Redressal Forum. As per the new amendment made, now the matter pertaining till Rs. 1 crore will be heard by the district commission, between Rs. 1 crore to 10 crores will be heard by the state commission and above Rs. 10 crores will be heard by the national commission as original jurisdiction. An appeal can even be made to the higher authorities. In the case of party unsatisfied with the National Commission’s judgement may even appeal to the Supreme Court of India.  

The toll-free number is 1800-11-4000 is available every day between 9:30 am to 5:30 pm (except on holidays). Or one can SMS to 8130009809. They will get back to you. The question is not about 1 or 2 rupees charged from you above MRP, the question is regarding the ethical business. If you will not raise the voice against the unethical practises carried out by any retailer then many others will also have to suffer. 

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