Amendments in Legal Metrology Rules, 2011: Confusion is in the label

The new labelling and packaging requirements are posing implementation challenges for businesses

The amendments to the Legal Metrology (Packaged Commodities) Rules 2011, approved by the Ministry of Consumer Affairs, Food and Public Distribution in June this year, come into effect from January 1 next year. However, implementation challenges are hobbling businesses that are in the process of meeting the new labelling and packaging requirements.

Experts point out that there are multiple pieces of legislation dealing with labelling on products. For example, there are requirements prescribed for medical devices under the Drugs and Cosmetics Act, 1940. Similarly, for food, there are declarations prescribed under the Food Safety and Standards Act. “With multiple laws, it is not clear whether for special items, such as food and medical devices, labelling requirements under each of these laws need to be followed,” says Rabindra Jhunjhunwala, partner, Khaitan & Co.

Further, in the case of not complying with labelling requirements that are common to these laws — such as giving the name and address of the manufacturer or importer — it is unclear whether action can be taken by all the different enforcing authorities, say legal experts. “It is important to issue clarification in this regard, so that businesses know the compliances which need to be followed and is not subject to undue hassle because of parallel prosecution under various laws,” says Jhunjhunwala.

The amendments prohibit manufacturers, packers, and importers from declaring different maximum retail prices for identical pre-packed commodities. “The implications of this amendment are unclear for commodities having different pricing schemes for business-to-business sales as compared to business-to-consumer,” says Shahana Chatterji, partner, Shardul Amarchand Mangaldas & Co. Industry players say this will impact sales of retail products to hotel chains and other enterprises. The cost of selling a product in a store may not be the same as selling the same item in a mall or an airport. “It will need to be seen how companies would, on a practical basis, be able to comply with this requirement of one product-one MRP,” says Jhunjhunwala.

The amendments provide for larger dimensions for text and numerals printed on packaging labels. However, as differing requirements exist under co-existent frameworks, it remains to be seen how businesses will reconcile conflicting requirements for commodities covered by multiple frameworks, says Chatterji.

When it comes to marketplace-based e-commerce entities, there are several grey areas in the rules relating to the manner of calculating the principal display panel for ascertaining the minimum height of the letters and numerals for the declarations and compliances. “The concept of marketplace-based models of e-commerce has not been understood completely. There are certain obligations placed on them that would be difficult to comply with,” says NU Subaya, partner, Dua Associates. Further, there is lack of clarity as to whether the other kinds of e-commerce entities, such as partnership firms, are exempt from the compliances, adds Subaya.

Experts point out that as the rules are enforced at state level, there are difficulties on account of a lack of coordination between the various state authorities. For instance, the penal provisions under the Legal Metrology (Packaged Commodities) Rules, 2011, lay down the consequences of initial offences and subsequent offences. However, offences are tracked independently by each state. “So an offence, even if committed by an entity multiple times, in a particular state it can amount to a first-time offence. This defeats the purpose of the legislation,” says Jhunjhunwala.

Experts say registration methods differ from state to state. For example, in Maharashtra, registration needs to be renewed every year whereas in other states, such as Delhi, there is no such requirement. Further, different legal metrology officers in many cases take different views on labelling requirements. The way forward would be to have uniform central guidelines to ensure consistency and transparency in enforcing the rules, say experts.