In response to the evolving landscape of direct selling in India, the Government of Meghalaya has taken significant steps to align with national standards. On November 9, 2022, the state republished the Consumer Protection (Direct Selling) Rules, 2021, as notified by the Central Government on December 28, 2021. This move underscores Meghalaya’s commitment to ensuring consumer protection and regulating direct selling entities within its jurisdiction.
The Rules, established under the Consumer Protection Act, 2019, provide a structured framework for direct selling entities (DSEs) and direct sellers. Here are the salient features:
- Scope and Applicability:
- The Rules apply to all goods and services sold through direct selling, encompassing all models and entities offering such services to consumers in India.
- They extend to DSEs not established in India but offering goods or services to Indian consumers.
- Mandatory Compliance:
- Existing DSEs were required to comply with these provisions within 90 days from the date of publication in the Official Gazette.
- Definitions and Clarifications:
- The Rules define key terms such as “direct seller,” “direct selling entity,” “pyramid scheme,” and “money circulation scheme,” providing clarity and legal precision.
- “Mis-selling” is identified as selling a product or service by misrepresentation, emphasizing the importance of truthful marketing.
- Prohibition of Pyramid and Money Circulation Schemes:
- DSEs are explicitly prohibited from promoting or participating in pyramid schemes or money circulation schemes, reinforcing consumer protection.
- Record Maintenance:
- DSEs must maintain comprehensive records at their registered offices, including incorporation documents, tax details, and other relevant records, either manually or electronically.
Implications for Direct Selling Entities in Meghalaya
With the republishing of these Rules, DSEs operating in Meghalaya must ensure:
- Legal Compliance: Adherence to the defined standards and practices to avoid legal repercussions.
- Transparency: Clear communication with consumers, avoiding misrepresentation and ensuring accurate information dissemination.
- Consumer Grievance Redressal: Establishment of mechanisms to address consumer complaints effectively and efficiently.
The Government of Meghalaya’s initiative to republish the Consumer Protection (Direct Selling) Rules, 2021, signifies a proactive approach to consumer rights and fair trade practices. Direct selling entities must align their operations with these regulations to foster trust and integrity in the marketplace.
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you can access the official notification here: Meghalaya Direct Selling Rules PDF.