[29]

TAMIL NADU

GOVERNMENT GAZETTE

PUBLISHED BY AUTHORITY

No. 32]

CHENNAI, WEDNESDAY, AUGUST 10, 2022

Aadi 25, Subakiruthu, Thiruvalluvar Aandu–2053

[Regd. No. TN/CCN/467/2012-14

GOVERNMENT OF TAMIL NADU

[R. Dis. No. 197/2009.

2022

[Price : Rs. 3.20 Paise.

Part III—Section 1(a)

General Statutory Rules, Notifications, Orders, Regulations, etc.,

issued by Secretariat Departments.

NOTIFICATIONS BY GOVERNMENT

CONTENTS

Pages.

CO-OPERATION, FOOD AND CONSUMER PROTECTION DEPARTMENT

The Consumer Protection (Direct Selling) Rules, 2021. ..

.. ..

30-35

The Consmer Protection (Jurisdiction of the District Commission, the State Commission and

the National Commission) Rules, 2021.

35-36

TAMIL NADU GOVERNMENT GAZETTE

[Part III-Sec.1(a)

NOTIFICATIONS BY GOVERNMENT

CO-OPERATION, FOOD AND CONSUMER PROTECTION DEPARTMENT

The Consumer Protection (Direct Selling) Rules, 2021.

[G.O. Ms. No. 71, Co-operation, Food and Consumer Protection (H1), 27th June 2022,

ஆனி 13, ²ðA¼¶, F¼õœÀõ˜ Ý‡´-2053.-]

No. SRO A-13/2022.—The following Notification of the Government of India Ministry of Consumer Affairs,

Food and Public Distribution (Department of Consumer Affairs) New Delhi, the 28th December 2021 is republished:-

G.S.R. 889(E).- In exercise of the powers conferred by clause (zg) of sub-section (2) of Section 101 read with Section

94 of the Consumer Protection Act, 2019, the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called the Consumer Protection (Direct Selling) Rules,

2021.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Application.- (1) Save as otherwise expressly provided, these rules shall apply to-

(a) all goods and services bought or sold through direct selling;

(b) all models of direct selling;

(d) all forms of unfair trade practices across all models of direct selling:

Provided that existing direct selling entities shall comply with the provisions of these rules within ninety days from

the date of publication of these rules in the Official Gazette;

(2) Notwithstanding anything contained in sub-rule (1), these rules shall also apply to a direct selling entity which

is not established in India, but offers goods or services to consumers in India.

3. Definitions.- (1) In these rules, unless the context otherwise requires,-

(a) "Act" means the Consumer Protection Act, 2019 (35 of 2019);

(b) "cooling-off period" means a period of time given to a participant to cancel the agreement he has entered

into for participating in the direct selling business without resulting in any breach of contract or levy of penalty;

contract to undertake direct selling business on principal to principal basis;

(d) "direct selling entity" means the principal entity which sells or offers to sell goods or services through

direct sellers, but does not include an entity which is engaged in a Pyramid Scheme or money circulation scheme;

(f)

"money circulation scheme" means the schemes defined in clause (c) of Section 2 of the Prize Chits and

Money Circulation Schemes (Banning) Act, 1978 (43 of 1978);

(g) "mis-selling" means selling a product or service by misrepresenting in order to successfully complete a

sale and includes providing consumers with misleading information about a product or service or omitting key information

about a product or providing information that makes the product appear to be something it is not;

(h) "prospect" means a person to whom an offer or a proposal is made by a direct seller to join a direct

selling entity;

(i)

"Pyramid Scheme" means a multi layered network of subscribers to a scheme formed by subscribers

enrolling one or more subscribers in order to receive any benefit, directly or indirectly, as a result of enrolment or action

or performance of additional subscribers to the scheme, in which the subscribers enrolling further subscribers occupy

a higher position and the enrolled subscribers a lower position, resulting in a multi-layered network of subscribers with

successive enrolments;

(j)

"saleable", in relation to goods or services, means unused and marketable goods or services which have

not expired, and which are not seasonal, discontinued or used for special promotion;

(k) "sensitive personal data" means the sensitive data or information as specified from time to time under

Section 43A of the Information Technology Act, 2000 (21 of 2000);

(I)

"State" includes a Union territory.

(2) Words and expressions used herein and not defined, but defined in the Act shall have the meanings

respectively assigned to them in the Act.

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TAMIL NADU GOVERNMENT GAZETTE

4. Mandatory maintenance of records.- Every direct selling entity shall maintain at its registered office, either

manually or electronically, all such documents as are required under any law for the time being in force, including the

following documents or records, as may be applicable, namely:-

(a) Certificate of Incorporation;

(b) Memorandum of Association and Articles of Association;

(d) Goods and Services Tax registration;

(e) Goods and Services Tax Returns;

(f)

Income Tax Returns;

(g) Balance Sheet, Audit Report and such other relevant reports;

(h) Register of direct sellers;

(i) Certificate of Importer-Exporter code (in case of imported goods) License issued under the Food Safety

and Standards Authority of India Act, 2006 (34 of 2006) for the purposes of manufacture or sale of food items;

(j) License and Registration Certificate issued under the Drugs and Cosmetics Act, 1940 (23 of 1940) for the

purposes of manufacture or sale of drugs, including Ayurvedic, Siddha and Unani drugs and Homoeopathic Medicines;

(k) Certificate of Registration of Trademark.

5. Obligations of direct selling entity.- (1) Every direct selling entity shall-

(a) if a company, be incorporated under the Companies Act, 2013 (18 of 2013) or if a partnership firm, be

registered under the Partnership Act, 1932 (9 of 1932) or if a limited liability partnership, be registered under the Limited

Liability Partnership Act, 2008 (6 of 2009);

(b) have a minimum of one physical location as its registered office within India;

in any Pyramid Scheme or money circulation scheme;

(d) maintain proper and updated website with all relevant details of that entity, including the documents or

records specified in rule 4, the self-declaration specified in clause (c), contact information which is current and updated,

details of its nodal officer, grievance redressal officer, its management, products, product information, price and grievance

redressal mechanism for consumers;

(e) own, hold or be the licensee of a trademark, service mark or any other identification mark which identifies

that entity with the goods or services to be sold or supplied, but shall not give commissions, bonus or incentives on sale

of goods or services of which it is not the owner, holder or licensee of trademark, service mark or other identification

marks;

(f) obtain all applicable trade registrations and licenses, including Permanent Account Number and Goods and

Services Tax Registration;

(g) get all information provided by it on its website duly certified by a Company Secretary.

Explanation.- For the purposes of this clause, "Company Secretary" means a person as defined in clause (c) of

sub-section (1) of Section 2 of the Company Secretaries Act, 1980 (56 of 1980);

(h) have a prior written contract with its direct sellers in order to authorize them to sell or offer to sell its

goods or services, and the terms of such agreement shall be just, fair and equitable;

(i) ensure that all its direct sellers have verified identities and physical addresses and issue identity cards and

documents only to such direct sellers;

(j) create adequate safeguards to ensure that goods and services offered by its direct sellers conform to

applicable laws;

(k) be liable for the grievances arising out of the sale of goods or services by its direct sellers.

(2) Every direct selling entity shall provide the following information on its website in a clear and accessible manner,

which shall be displayed prominently to its users, namely:-

(a) registered name of the direct selling entity;

(b) registered address of the direct selling entity and of its branches;

TAMIL NADU GOVERNMENT GAZETTE

[Part III-Sec.1(a)

grievance redressal officers;

(d) a ticket number for each complaint lodged through which the complainant can track the status of the

complaint;

(e) information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of

payment, grievance redressal mechanism and such other information which may be required by the consumers to make

informed decisions;

(f) information on available payment methods, the security of those payment methods, the fees or charges

payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any, and the

contact information of the relevant payment service provider;

(g) total price of any goods or service in single figure, along with its break-up price showing all compulsory

and voluntary charges, including delivery charges, postage and handling charges, conveyance Charges and the applicable

tax;

(h) provide correct and complete information at pre-purchase stage to enable buyers to make informed purchase

decisions, and such information shall, in addition to the mandatory declarations to be provided under the Legal Metrology

(Packaged Commodities) Rules, 2011, contain the following information, namely:-

(i) the name of purchaser and seller;

(ii) description of goods or services;

(iii) quantity of goods or services;

(iv) the estimated delivery date of goods or services;

(v) the process of refund; .

(vi) warranty of the goods;

(vii) exchange or replacement of goods in case of it being defective;

(viii) all contractual information required to be disclosed by or under any law for the time being in force.

(3) No direct selling entity shall adopt any unfair trade practice in the course of its business or otherwise, and

shall abide by the requirements specified in any law for the time being in force.

(4) All products of a direct selling entity shall comply with the declarations to be made under the Legal Metrology

Act, 2009, (1 of 2010).

(5) Every direct selling entity shall store sensitive personal data within the jurisdiction of India, in accordance with the

applicable law for the time being in force and shall take appropriate steps to ensure protection of such data provided by

a consumer and also ensure adequate safeguards to prevent access or misuse of such data by any unauthorized person.

(6) Every direct selling entity shall, having regard to the number of grievances ordinarily received by such entity from

persons in India, establish an adequate grievance redressal mechanism and appoint one or more grievance redressal

officers for redressal of consumers' grievances and display the current and updated name, contact details including

telephone number, email address and designation of such officer on its website, and the details of its website shall also

be prominently printed on the product information sheet or pamphlet.

(7) Every direct selling entity shall ensure that the grievance redressal officer referred to in sub-rule (6) acknowledges

the receipt of any consumer complaint within forty-eight working hours of receipt of such complaint and redresses the

complaint normally within a period of one month from the date of receipt of the complaint and in case of delay of more

than a month, reasons for the delay, and the actions taken on the complaint, are informed to the complainant in writing.

(8) Every direct selling entity shall appoint a nodal officer who shall be responsible for ensuring compliance with

the provisions of the Act and the rules made thereunder, and to ensure compliance with any order, or requisition, made

in accordance with the provisions of any other law for the time being in force or the rules made thereunder.

(9) Every direct selling entity shall establish a mechanism for filing of complaints by consumers through its offices

or branches or direct sellers, either in person or through post, telephone, e-mail or website.

(10) Every direct selling entity shall maintain a record of all its direct sellers, including their identity proof, address

proof, e-mall and such other contact information.

(11) Every direct selling entity shall, on the request in writing made by a consumer after the purchase of any

goods or services, provide him with the information regarding any direct seller from whom such consumer has made

a purchase, and such information shall include the name, address, e-mail, contact number and any other information

which is necessary for making communication with such direct seller for effective dispute resolution.

Aug. 10, 2022]

TAMIL NADU GOVERNMENT GAZETTE

(12) Every direct selling entity shall ensure that the advertisements for marketing of goods or services are consistent

with the actual characteristics, access and usage conditions of such goods or services.

(13) No direct selling entity shall, directly or indirectly, falsely represent itself as a consumer and post reviews about

its goods or services or misrepresent the quality or features of any of its goods or services.

(14) A direct selling entity which explicitly or implicitly vouches for the authenticity of the goods or services sold,

or guarantees that such goods or services are authentic, shall bear the liability in any action related to the authenticity

of such goods or services.

(15) Notwithstanding the distribution system adopted by it, a direct selling entity shall monitor the practices adopted

by its direct sellers and ensure compliance with these rules by means of legally binding contract with such direct sellers.

(16) Every direct selling entity shall maintain a record of relevant information allowing for the identification of all

direct sellers who have been delisted by the direct selling entity and such list shall be publicly shared on its website.

(17) Every direct selling entity shall become a partner in the convergence process of the National Consumer Helpline

of the Central Government.

6. Obligations of direct seller.- (1) Every direct seller shall-

(a) have a prior written contract with the direct selling entity for undertaking sale of, or offer to sell, any

goods or services of such entity;

(b) at the initiation of any sale representation, truthfully and clearly identify himself, disclose the identity of the

direct selling entity, the address of place of business, the nature of goods or services sold and the purpose of such

solicitation to the prospect;

services, prices, credit terms, terms of payment, return, exchange, refund policy, return policy, terms of guarantee and

after-sale service;

(d) provide an order form to the consumer at or prior to the time of the initial sale, which shall identify the

direct selling entity and the direct seller and shall contain the name, address, registration number or enrollment number,

identity proof and contact number of the direct seller, complete description of the goods or services to be supplied,

the country of origin of the goods, the order date, the total amount to be paid by the consumer, the time and place

for inspection of the sample and delivery of goods, consumer's rights to cancel the order or to return the product in

saleable condition and avail full refund on sums paid and complete details regarding the complaint redressal mechanism

of the direct selling entity;

(e) obtain goods and service tax registration, Permanent Account Number registration, all applicable trade

registrations and licenses and comply with the requirements of applicable laws, rules and regulations for sale of a

product;

(f) ensure that actual product delivered to the buyer matches with the description of the product given;

(g) take appropriate steps to ensure the protection of all sensitive personal information provided by the consumer

in accordance with the applicable laws for the time being in force and ensure adequate safeguards to prevent access

to, or misuse of, data by unauthorized persons.

(2) A direct seller shall not.-

(a) visit a consumer's premises without identity card and prior appointment or approval;

(b) provide any literature to a prospect, which has not been approved by the direct selling entity;

(d) in pursuance of a sale, make any claim that is not consistent with claims authorized by the direct selling

entity.

7. Duties of direct selling entity and direct seller.- Subject to the provisions of Chapter VI of the Act, relating to

Product Liability, the following shall be the duties of direct selling entity and direct seller, as may be applicable, namely:-

(i) Every direct selling entity and every direct seller shall ensure that-

(a) the terms of the offer are clear, so as to enable the consumer to know the exact nature of offer being

made and the commitment involved in placing any order;

(b) the presentations and other representations used in direct selling shall not contain any product description,

claim, illustration or other element which, directly or by implication, is likely to mislead the consumer;

with regard to price and, if applicable, to credit conditions, terms of payment, cooling-off periods or right to return, terms

of guarantee, after-sales service and delivery;

TAMIL NADU GOVERNMENT GAZETTE

[Part III-Sec.1(a)

(d) the descriptions, claims, illustrations or other elements relating to verifiable facts are capable of substantiation;

(e) any misleading, deceptive or unfair trade practices are not used;

(f) direct selling is not represented to the consumer as being a form of market research;

(g) the promotional literature, advertisement or mail contain the name and address or telephone number of

the direct selling company, and include the mobile number of the direct seller;

(h) direct selling shall not state or imply that a guarantee, warranty or other expression having substantially

the same meaning, offers to the consumer any rights in additional to those provided by law, when it does not;

(i) the terms of any guarantee or warranty, including the name and address of the guarantor, shall be easily

available to the consumer and limitations on consumer rights or remedies, where permitted by law, shall be clear and

conspicuous;

(j) the remedial action open to the consumer shall be clearly set out in the order form or other accompanying

literature provided with the goods or service;

(k) the presentation of the offer does not contain or refer to any testimonial, endorsement or supportive

documentation unless it is genuine, verifiable and relevant;

(I) when after-sales service is offered, details of the service are included in the guarantee or stated elsewhere

in the offer and if the consumer accepts the offer, information shall be given on how the consumer can activate the

service and communicate with the service agent;

(m) products, including, where applicable, samples, are suitably packaged for delivery to the consumer and for

possible return, in compliance with the appropriate health and safety standards;

(n) unless otherwise stipulated in the offer, orders shall be fulfilled within the delivery date proposed to the

consumer at the time of purchase and the consumer shall be informed of any undue delay as soon as it becomes

apparent or comes within the knowledge of the direct selling entity or the concerned direct seller;

(o) in cases of delay under clause (n), any request for cancellation of the order by the consumer shall be

granted, irrespective of whether the consumer has been informed of the delay, and the deposit, if any, shall be refunded

as per the cancellation terms proposed to the consumer at the time of purchase, and if it is not possible to prevent

delivery, the consumer shall be informed of the right to return the product at the direct selling company's or the direct

seller's cost as per the procedure for return of the goods proposed to the consumer at the time of purchase;

(p) right of return offered by that entity shall be in writing;

(q) whether payment for the offer is on an immediate sale or installment basis, the price and terms of payment

shall be clearly stated in the offer together with the nature of any additional charges such as postage, handling and

taxes and, whenever possible, the amounts of such charges;

(r) in the case of sales by installment, the credit terms, including the amount of any deposit or payment

on account, the number, amount and periodicity of such installments and the total price compared with the immediate

selling price, if any, shall be clearly shown in the offer;

(s) any information needed by the consumer to understand the cost, interest and terms of any other form of

credit is provided either in the offer or when the credit is offered;

(t) unless the duration of the offer and the price are clearly stated in the offer, prices shall be maintained

for a reasonable period of time;

(u) the procedure for payment and debt collection shall be determined in writing before any contract is signed

and it shall be such as to avoid undue inconvenience to the consumer, making due allowance for delays outside the

consumer's control;

(v) the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules framed thereunder shall be

followed.

(ii) A direct selling entity or direct seller shall not-

(a) indulge in fraudulent activities or sales and shall take reasonable steps to ensure that participants do

not indulge in false or misleading representations or any other form of fraud, coercion, harassment, or unconscionable

or unlawful means;

(b) engage in, or cause or permit, any conduct that is misleading or likely to mislead with regard to

any materiel particulars relating to its direct selling business, or to the goods or services being sold by itself or by the

direct seller;

(d) use, or cause or permit to be used, any fraudulent, coercive, unconscionable or unlawful means, or cause

harassment, for promoting its direct selling business, or for sale of its goods or services;

Aug. 10, 2022]

TAMIL NADU GOVERNMENT GAZETTE

(e) refuse to take back spurious goods or deficient services and refund the consideration paid for goods and

services provided;

(f) charge any entry fee or subscription fee.

(3) A direct selling entity and a direct seller shall comply with the requirements of all relevant laws, including

payment of taxes and deductions thereunder.

(4) A direct selling entity and a direct seller shall not induce consumers to make a purchase based upon the

representation that they can reduce or recover the price by referring prospective customers to the direct sellers for

similar purchases.

8. Persons not to be engaged in the business of direct selling.- No person who is convicted, or bankrupt during

the last five years prior to his association with the business of direct selling, or a person of unsound mind, shall be

engaged in the business of direct selling.

Explanation.- For the purpose of this rule, the term 'Bankrupt' shall have the same meaning as assigned to

it in clause (3) of Section 79 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

9. Application of e-commerce rules.- The direct sellers as well as the direct selling entities using e-commerce

platforms for sale shall comply with the requirements of the Consumer Protection (e-Commerce) Rules, 2020.

10. Prohibition of Pyramid Scheme and money circulation scheme.- No direct selling entity or direct seller shall-

(a) promote a Pyramid Scheme or enroll any person to such scheme or participate in such arrangement in

any manner whatsoever in the garb of doing direct selling business;

(b) participate in money circulation scheme in the garb of doing direct selling business.

11. Monitoring by State Government.- For ensuring compliance of these rules by direct selling entity and direct

sellers, every State Government shall set up a mechanism to monitor or supervise the activities of direct sellers and

direct selling entity.

12. Inconsistencies in laws.- Where any regulation made under the Reserve Bank of India Act, 1934 (2 of 1934)

is applicable to a direct selling entity governed under these rules, the provisions of such regulations shall prevail over

the provisions of these rules to the extent of inconsistency.

13. Contravention of rules.- The provisions of the Act shall apply for any contravention of these rules.

[F.No. J-10/9/2018 - CPU]

Anupam Mishra,

Joint Secretary.

(Re-published by order of the Governor).

J. RADHAKRISHNAN,

Principal Secretary to Government.

The Consumer Protection (Jurisdiction of the District Commission, the State Commission and the

National Commission) Rules, 2021.

[G.O. Ms. No. 72, Co-operation, Food and Consumer Protection (H1), 27th June 2022,

ஆனி 13, ²ðA¼¶, F¼õœÀõ˜ Ý‡´-2053.-]

No. SRO A-14/2022.—The following Notification of the Government of India Ministry of Consumer Affairs, Food and

Public Distribution (Department of Consumer Affairs) New Delhi, the 30th December 2021 is republished:-

G.S.R. 912(E).- In exercise of the powers conferred by provisos to sub-section (1) of Section 34, sub-clause (i) of

clause (a) of sub-section (1) of Section 47 and sub-clause (i) of clause (a) of sub-section (1) of Section 58 read with

sub-clauses (o), (x) and (zc) of sub-section (2) of Section 101 of the Consumer Protection Act, 2019 (35 of 2019), the

Central Government hereby makes the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called the Consumer Protection (Jurisdiction of the

District Commission, the State Commission and the National Commission) Rules, 2021.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions.- (1) In these rules, unless the context otherwise requires,-

TAMIL NADU GOVERNMENT GAZETTE

[Part III-Sec.1(a)

(a) "Act" means the Consumer Protection Act, 2019 (35 of 2019);

(b) "District Commission, State Commissions and National Commission" shall have the meaning assigned

to them in the Act.

(2) The words and expressions used herein, but not defined and defined in the Act, shall have the same meaning

assigned to them in the Act.

3. Jurisdiction of District Commission.- Subject to the other provisions of the Act and in pursuance of

proviso to sub-section (1) of Section 34 of the Act, the District Commission shall have jurisdiction to entertain complaints

where the value of the goods or services paid as consideration does not exceed fifty lakh rupees.

4. Jurisdiction of State Commission.- Subject to the other provisions of the Act and in pursuance of

proviso to sub-clause (i) of clause (a) of sub-section (1) of Section 47, the State Commission shall have jurisdiction to

entertain complaints where the value of the goods or services paid as consideration exceeds fifty lakh but does not

exceed two crore rupees.

5. Jurisdiction of National Commission.- Subject to the other provisions of the Act and in pursuance of proviso to

sub-clause (i) of clause (a) of sub-section (1) of Section 58, the National Commission shall have jurisdiction to entertain

complaints where the value of the goods or services paid as consideration, exceeds two crore rupees.

[F.No. S-10/9/2018 - CPU]

Anupam Mishra,

Joint Secretary.

(Re-published by order of the Governor).

J. RADHAKRISHNAN,

Principal Secretary to Government.

PRINTED AND PUBLISHED BY THE COMMISSIONER OF STATIONERY AND PRINTING, CHENNAI

ON BEHALF OF THE GOVERNMENT OF TAMIL NADU