International retailers, who operate in the country under the single brand retail FDI policy, have urged the Centre to decriminalise provisions that can lead to imprisonment under the Legal Metrology Act. The Act, which enforces standards for weights and measurements and packaging norms for products, has provisions for which companies can face criminal liabilities including jail terms.

Sources said in a recent meeting with Department for Promotion of Investments and Internal Trade (DPIIT) officials, representatives of some of the single brand retailers raised concerns regarding provisions that make senior executives, including Directors, liable to criminal proceedings for violations of provisions of the Packaged Commodities Rules.

Compliance burden

“Some industry representatives also pointed out that certain provisions in the Act increased the compliance burden, especially when violations took place not intentionally but due to an oversight,” a source said.

Players also said certain mandatory declaration, such as the exact location of manufacturing within the country, were cumbersome in terms of labelling provisions.

Ikea, H&M, Uniqlo, Adidas, Decathlon, and Xiaomi are some of the key companies that operate stores in the country under the single brand retail FDI policy. Senior executives from some of these companies were part of the meeting on Wednesday, another source said.

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Under the Packaged Commodities Rules of the Legal Metrology Act, companies have to make key declarations such as MRP, net quantity, name and date of manufacturing/packing/importing, country of origin, consumer care details among others.

Replacing jail terms

The Department of Consumer Affairs, the nodal department for legal metrology, has been in consultation with States on its proposal to decriminalise the Legal Metrology Act. This is because a part of the law enforcement falls in the States’ domain, said an official.

The department, in a presentation to the Committee of Secretaries on reduction of compliance burden, had said it proposed to replace jail-terms for violators with heavy fines (up to ₹2 lakh) and cancellation of licence for subsequent offences. The various violations include use of non-standard weights or tampering and selling of non-standard packages in declarations and quantities.

This would have the two-pronged benefit of not only improving business sentiments, but also leading to unclogging of courts.

Another suggestion being examined is to allow a company to nominate any managerial level person, instead of the director, as the person responsible for the conduct of business.

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