LMPC issued-regulations for the Dealer Certification

Every Dealer Certification holder must abide by the provisions of the Legal Metrology Prepackaged Commodity (LMPC) Rules to run its operations smoothly in the market. Here in this article, we have discussed the kinds of dealership license holders in the Indian Market and the LMPC regulations to which such dealers must conform. 

What is a Dealer, according to Legal Metrology?

A certified Dealer is a person or a firm that carries on the Business of buying, selling, supplying, or distributing a commodity for any of the following purposes (s):

• Cash
• Deferred Payment
• Commission
• Remuneration
• Other valuable consideration

A dealer can hire a commission agent who carries on the Business. But the Agent must not be a manufacturer who manufactures any commodity sold or distributed in a packaged form. The only exception is a commodity that a manufacturer sells to anyone other than a dealer.

Types of Dealer Certification

Retail Dealer

A Retail Dealer is a registered dealer certification holder who directly sells some commodity packages to the consumer. These dealers include a wholesale dealer who makes a direct sale about the packages sold directly to the consumer.

Wholesale Dealer

A Wholesale Dealer is a registered dealer certification holder who does not directly sell a commodity to any consumer. Instead, he distributes or sells such commodities through one or more intermediaries.

LMPC Provisions for Wholesale and Retail Dealer Certifications

No wholesale or Retail authorized dealership certificate holder must sell, distribute, deliver, store or display any commodity in the packaged form for sale. This is unless the package complies with, in all respects, the provisions of the Act and rules.

Stipulated Price Limit

No retail dealer certificate holder, including manufacturer, packer, importer, or wholesale dealer, must sell any commodity in the packed form at a price exceeding the retail sale price.

Retail Price Revision

Suppose a commodity has been pre-packed for sale, and the tax payable on a such commodity is revised. In that case, the retail dealer or any other person cannot make any retail sale of a such commodity at a price that exceeds the revised retail sale price. The price must be communicated to him by the manufacturer. If the commodity’s manufacturer is not the packer, then the manufacturer or packer must indicate the price revision to the dealer. The indication can be notified in fewer than two advertisements in one or more newspapers. The manufacturer can also convey the revised price by the circulation of notices to the following entities:

• Dealer License holders
• Director in the Central Government
• Controllers of Legal Metrology, both in the States and UTs

Difference between Rates for Dealer Certification

The difference between the package’s marked price and the revised price by the manufacturer must not, in any case, be higher than the following:

• The extent of the increase in the tax
• Imposition of fresh tax which is higher than the existing tax

Revised Price Advertisement

The publication in any newspaper of such a revised price is unnecessary. Such revision is due to the increase in or imposition of any tax payable under any law made by the State Legislation. Also, the retail dealer must not charge such revised prices for any packages. The only exception to this are packages which bear certain marks. These marks indicate the commodity was pre-packed in the month before the following events:

• Tax was revised
• A fresh tax was imposed in the next month

If the revised prices are lower than the price marked on the package, the retail dealer cannot charge any price over the revised price. This must be irrespective of the month in which the commodity was pre-packed.

Labeled Price Alteration for Dealer Certification

No wholesale or retail dealer must obliterate, smudge, or alter the retail sale price indicated by the manufacturer, packer, or importer on the package or the label affixed. In addition, the manufacturer, packer, or importer cannot alter the price of the wrapper once printed and used for packing.

Required Machinery for Conducting LM-certified Dealership Business

Some retailers are covered under the Value Added Tax or Turn Over Tax. They deal in packaged commodities whose net content declaration is by weight, volume, or combination. Such retailers must maintain an electronic weighing machine of at least class III accuracy. The accuracy of the machine must be at the smallest division of at least 1 g. Also, they must have the facility to issue a printed receipt. These receipts must indicate other things like the gross quantity and price. Also, these details must be displayed at a prominent place in their retail premises, free of cost, for the benefit of consumers. Therefore, the consumers can check the weight of their commodities purchased from the shop on such a machine.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.