Maximum Retail Price (MRP) and Over-Charging

Tue, 06/02/2018 - 13:21

Maximum Retail Price (MRP) is a manufacturer-calculated and purposive price. It is the maximum price at which the products can be sold to the customer and is inclusive of all taxes. Furthermore, having an MRP may help in ensuring that people do not black-market products.

Charging above MRP is an offence for which the trader can be prosecuted. Section 36 of Legal Metrology Act clearly states that whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale, or causes to be sold, distributed, delivered or otherwise transferred, offered, exposed for sale any pre-packaged commodity that does not conform to the declarations on the package shall be punished with fine up to Rs 25,000 for the first offence. It can increase to Rs 50,000 for the second offence and subsequent offences can attract a fine of up to Rs 1 lakh or imprisonment for one year or both.

Despite this, many shops, especially those in the periphery of Chennai and in other districts of Tamilnadu, continue to sell water packets, water bottles, cool drinks and few other packed commodities at more than the MRP. Consumers can register complaints about overcharging with the Legal Metrology Department. The Tamil Nadu Legal Metrology Department has launched a Complaint Tracking System (TN – LMCTS) application, which is both mobile-based and web-based. Consumers can take photographs or video of the commodity and the shop and register their complaints through the app. The app also helps consumers track their complaint status.

Over-charing is also considered to be an unfair trade practice, as defined under the Consumer Protection Act.

Case study I: It cost a retail store dearly, for charging one rupee above MRP. A consumer had purchased three packets of Unibic butter cookies from the store for Rs. 39 — each packet being billed at Rs. 13. After buying the product, he looked at the cover and found the maximum retail price marked was Rs. 12 per packet. When he asked the store staff to refund the amount, they refused. He also sent a letter asking the retail store to refund the excess amount and to refrain from selling products at higher prices, for which there was no response. Left with little option, the consumer approached the Consumer Forum.

After perusing the bills and proof provided by the complainant, the District Consumer Disputes Redressal Forum, Chennai (North), observed that the retail store had resorted to unfair trade practice of selling the product at higher price than the actual maximum retail price printed in the packet of the product and thus, directed the store to pay the complainant Rs. 7,003 – towards the excess amount charged (Rs. 3), Rs.5,000 as compensation, and Rs. 2,000 as costs.

It is important for consumers to ask for a bill during purchase as this will be an important, additional evidence to prove the unfair trade practice.

Case study II: CAG received a complaint wherein the consumer was charged Rs.2/- above the MRP for the purchase of Tata Gluco Plus. The consumer was concerned if his complaint was a valid one, as the sum involved was just two rupees. We explained to him that to charge even one rupee above MRP was illegal and therefore, his complaint was valid. The shop owner had refused to issue a bill. CAG took up the matter with the shop owner, following which, he refunded the excess sum of Rs.2/- to the consumer. CAG also advised the consumer that he could complain to the legal metrology department about such cases.

 

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