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Stabalisation of prices of Essential Commodities

The Consumer Affairs Authority takes measures to stabilize the prices of essential (Specified) commodities at reasonable levels, by provisions granted in Sections 14, 18 and 19 of the Consumer Affairs Authority Act No.9 of 2003. Where an item is specified as an essential commodity under Section 18 of the Act, an importer, manufacturer or trader has to obtain the prior written approval of the Authority before increasing the price of such item. Acting under Section 19 of the Act, the Authority can intervene in situations of “excessive pricing” and determine a Maximum Retail Price for such commodity. Section 14 of the Act facilitates agreements on prices with manufacturers and traders.

Goods or services specified under Section 18 (1) of the Act will be published in the Gazette of the Government of Sri Lanka.

The items that are gazetted as specified items under Section 18 are:

1. Milk Powder - Full Cream

2. LPG

3. Wheat Flour

4. Cement

5. Chicken Meat

6. White Sugar

7. Dried Chilies

8. Big Onions

9. Red Onions

10. Dhal

11. Dried Sprats

12. Gram

13. Green Moong

14. Rice

15. Canned Fish

Once a product or service is specified as an specified commodity under Section 18(1) of the Act, sections 18(2) and 18(3) require a manufacturer or trader marketing such commodity or service to obtain the prior written approval of the Authority before increasing the price. Section 18(4) of the Act requires the Authority to give its decision within 30 days of the submission of a proper application, unless the applicant company has not provided the required assistance to the Authority to conduct a proper examination of the application, in which event the Authority is empowered to issue an “Interim Order” prohibiting the company from increasing the price until a decision is made.

The Procedure for Making an Application is set out as below:

Applications for approval of price increases under Section.18 of the Act

Who are required to make applications?

 

Any importer, manufacturer, or trader who wants to increase the price of the specified item above the prevailing price level.

 

How to submit an application?

 

By a letter signed by the CEO or other officer authorized by the company to do so, giving a description of the item, brand name, pack size, present price, proposed price and reasons for the price increase. The application should be addressed to the Director General of the Authority:

Address:

The Consumer Affairs Authority,

1st & 2nd Floors,

CWE Secretariat building,

27, Vauxhall St.,

Colombo 02,

Sri Lanka

Telephone: +94-11-7755476

Fax: +94-11-2399148

E-mail: dgcaa@sltnet.lk

�

Supportive documents be attached to the application

 

� 1. Comprehensive Cost Structure, giving a breakdown of costs of individual elements of cost, for the prevailing price and the proposed price.

�2. Supporting documents, eg., Copies of Invoice, Letter of Credit, Bill of Lading, Packing List, Customs certified Customs Declaration Form (CUSDEC), Bank bills, invoices and receipts for landing , delivery and transport expenses, up to 1st go-downs

� 3. Invoices for packing and processing expenses

�4. Description of all direct expenses, including labor and material

�5. Analysis of indirect and overhead expenses, and basis of allocation, apportionment and recovery of overheads.

�6. Company profit margins, and basis

�7. Distributor / Dealer and retailer margins

� 8. Charge for taxes

�9. Copy of the latest Audited Final accounts with notes and schedules thereon for the present period and for the perio applicable for determining the current price.

“SPECIMEN COST SHEET” is available on request. This can be suitably modified by the applicant to suit the specialities of the product or the industry.

 

What is the position if information of documents furnished is incomplete?

 

The applicant will be duly requested to furnish the information, on or before a specified date.

 

What will happen due to a failure on the part of the applicant to furnish the documents / information on time, or to give any assistance required to carry out the inquiry?

 

An Interim Order” under Section 18(4) of the Act will be issued to the applicant prohibiting the applicant from increasing the price, until a decision is made by the Authority.

 

What is the validity period of the Interim Order?

 

Interim order is valid until the required information is furnished and decision communicated

 

What is the period within which a decision will be communicated by the Authority?

 

Thirty days from the date the Authority having received a duly completed application together with all supporting information/clarifications/ documents.

 

Examination and Approval Procedure for Pricing Applications

 

Which division of the CAA does the examination of pricing applications?

 

The Pricing & Management Division

 

What are the contact details?

 

Director, Pricing & Management.

Telephone: +94-11-7755462

or

Assistant Director/ Pricing & Management.

Telephone: +94-11-7755461

Address:

1st & 2nd Floor,

CWE Secretariat Building,

27, Vauxhall Street.

Colombo 02.

E-mail Address: caaoffice@sltnet.lk

 

What is the approving authority of a price?

 

The pricing committee of the Authority.

 

What is the manner of communicating a decision?

 

By Facsimile & Registered mail

 

Appeals / Disputes

 

Is there a right of further appeal if the appeal?

 

The Court of Appeal

 

Pricing arrangements under Section.14

 

Provision available for entering into written agreements with importers; manufacturers; traders for fixing of maximum price above which goods cannot be sold

 

Pricing decisions under Section.19

 

The Director General, in consultation with the Authority may request the Council to inquire into and report cases of “excessive pricing”, and a determination can be made by the Authority based on the outcome of such inquiry.

 

Penal provisions for violations of conditions of Act relating to pricing under Section 18

 

By action filed in the Magistrates Court

1st Offence – no exemption

1st and subsequent offences – A fine up to Rs.1 million, as may be determined by Court

 

Supply of other information required by Authority

 

Refer to Section 57 of the CAA Act

 

Maintenance of records required by Authority

 

Refer Section 56 of the CAA Act

 

Maintain Confidentiality of information furnished to Authority

 

Refer to Section 57(2) of the CAA Act

 

Regulations on Price Marking

 

Order by gazette; alterations of marked price Regulations under Section 10 (4) of the Act

 

Form for Registration in Data Base of Importers/Manufacturers:

 

Every importer, manufacturer, processor or trader handling any commodity or service specified under Section 18(1) of the Act is required to register in the Data Base of the CAA, by completing and furnishing the relevant information, substantially in the format (CAA F1) given below,

 

Cost Structure:

 

Every importer, manufacturer, processor or trader submitting an application (CAA F2) for approval of a price increase of an item specified under Section 18(1) of the Act, is required to furnish the information shown in the Specimen Cost Structure given below. The form may be suitably modified to suit the peculiarities of the type of business or industry.

 

Time Line

 

Process Timeline:

 

The decision is given within 30 days of submission of the request and the cost structure.

 

Submission Timeline:

 

Working days - Monday to Friday

Open Hours - 8:30 to 4:15 hrs

Holidays - All Public and Mercantile Holidays

 

Cost Related to the Services

 

Cost: There are costs involved in providing this service.

Fee: The service is provided free of charge.

Penalties: A fine is charged at instances where the manufacturer or trader increases the price of the prescribed commodity without the permission of the Consumer Affairs Authority.

 

Special Cases

 

Not applicable

 

Sample Forms with Dummy Data

 

Provided by the Authority

Organization Information Consumer Affairs Authority Consumer Affairs Authority 1st& 2nd floor, CWE Secretariat Building, No: 27, Vauxhall Street, Colombo 02. Mrs.MMSK Karunaratne Telephones:011-7755456-7, 011-7755475 Consumer Complaint 011-7755481-3 Fax Nos:011-2399148 Email:chairmancaa@sltnet.lk / dgcaa@sltnet.lk Website: www.caa.gov.lk