Highlights of Consumer Protection Act 2018

Consumer Protection Act, 2018 implemented on September of

2018, is the relevant act in Nepal in order to protect the
interest of consumers regarding the quality, quantity and price
of the consumer goods and services. The Act has tried to
address the shortcomings of the Consumer Protection Act,
1998. Some of the major highlights of the Consumer Protection
Act 2018 are as follows:

Redefining Service

The existing and the previous Consumer Protection Acts both

consist of the legal provisions for the protection of consumer
who consume any goods or services. However, existing
Consumer Protection Act has not only limited such services to
labor, facility or consultancy but recognizes services such as
electricity, drinking water supply, telephone, information
technology, health, education and consultation, transport,
drainage, banking or other services of similar nature, including
legal, medical or engineering services.

Other Parties

Furthermore, unlike previous Act, Consumer Protection Act

2018 is not only limited to rights of consumer but also provides
liability of parties associated to marketing of goods or services
which include producer, importer, carrier, hoarder, seller and
service provider under Chapter 3 of the Act. The existing Act
has defined such parties, their liabilities and means of legal
remedies.
Regulation of Goods or Services

The previous Act provided very little as to how the goods or

services were to be regulated. The Consumer Protection Act
2018 has elaborated in this regard. Pursuant to Section 4 of the
Act, Government of Nepal shall perform various functions from
implementing policy, facilitating the supply system,
coordinating with concerned agencies, etc. in order to regulate
the supplies, price, quality, measurement, label and
advertisement of the goods and services.

Affix Label

Affixing label mentioning various particulars regarding the

goods is a requirement under both the existing and the
previous Acts. However, the existing Consumer Protection Act
prohibits import, sale and distribution of goods on which label
is not affixed pursuant to Section 6 of the Act.

Prohibited Activities

Chapter 4 of the Consumer Protection Act 2018 prohibits

various activities in order to protect consumers. The Act has
tried to address the shortcomings of the previous Act by
elaborating and extending the prohibited activities. Some of
which are as follows:

 To conduct unfair trade and business activities:

i. The Act elaborates on the unfair trade and business

activities which include:
ii. Selling or providing goods or services by lying, concealing
or hiding,
iii. Creating artificial shortage of, hoarding or selling any
goods,
iv. Refusing to issue bill or invoice of the sold goods or service
or not issuing bill or invoice,
v. Providing service without specifying the price, quality of
service, etc.

 To cause adverse impact on demand, supply or price:

Distribution, transport, or hindering the sale and distribution of

any goods by taking profit higher that that prescribed and over
the cost invested in the production, import, transport, hoarding
or selling and distribution of such goods is prohibited by the
Act.

 Producing, selling or importing sub-standard goods

knowingly,
 Selling any goods or services by lying or deceiving that the
goods or services are other goods or services and stating
high standard goods or services,
 Producing or selling the goods or service that cause
adverse impact upon the health of consumer.

Relevant Authorities

The relevant government authorities in the previous Consumer

Protection Act were limited to Consumer Protection Council,
District Court, Appellate Court and Compensation Committee.
The existing Act has removed the provision regarding
Compensation Committee and extended the relevant
government authorities of Nepal for the consumer right
protection. They are listed below.

 Ministry of Industry, Commerce and Supplies

 Department of Commerce, Supplies and Consumers
Welfare Protection Department
 Consumer Protection Council
 Central, Provincial and Local Market Monitoring
Committee
 Consumer Court
 District Court

Making a complaint

The previous Act provided for the complaints to be filed with

the Compensation Committee. However, there is no
Compensation Committee under the existing Act. It provides
that any complaint be filed in writing or orally or even through
electronic means to the Central Marketing Monitoring
Committee, Department or Inspection Officer, along with the
information or proof and evidence under his or her custody.

Filing Lawsuits

Any Lawsuits related to offences punishable under the previous

Act was to be filed with the concerned district court. However,
Consumer Protection Act 2018 provides for the constitution of
Consumer Court in order to try and settle cases or complaints.
Such cases and complaints are transferred to the concerned
district court only if the Consumer Court gets dissolved by the
Government of Nepal.

Compensation

Pursuant to the previous Consumer Protection Act, consumer

suffering loss or damage could file a complaint with
Compensation Committee for Compensation. However, the
existing Act provides that such complaints for realization of
compensation are to be filed at the Consumer Court.

Reward to informant

The existing Act also provides for reward of ten percent of the
claimed amount recovered or one million rupees, whichever is
the lesser, to the person who provides information that the
offence has been or is going to be committed. There were no
such provisions in the previous Act.