Himachal Pradesh Govt takes steps to regulate businesses and ensure price stability

Himachal Pradesh Govt takes steps to regulate businesses and ensure price stability

Shimla, May 17

In a recent notification issued by RD Nazeem, Principal Secretary (FCS&CA) to the Government of Himachal Pradesh, invoked three old acts to regulate businesses in the state. These measures aim to prevent artificial shortages, promote price stability, and discourage unfair trade practices.

The first act, the Himachal Pradesh Hoarding and Profiteering Prevention Order, 1977, protects consumers from exorbitant hoarding and profiteering. It ensures fair prices in the market for equitable distribution and imposes strict penalties on offenders to crack down on hoarding practices and prevent unjustified price hikes.

The second act, the Himachal Pradesh Commodities Price Marking and Display Order, 1977, requires all traders and retailers to prominently display the prices of essential commodities. This promotes transparency and enables consumers to make informed choices.

The invoking of these two orders enhances transparency in the business market and secures the rights of consumers.

It is important to note that after the introduction of the Goods and Services Tax (GST), state governments no longer have the means to earn revenue from local taxes and fees. However, revoking the Himachal Pradesh Trade Article (Licensing and Control) Order, 1981, will provide a new source of revenue, perhaps for the Government. Under this order, every business in the state (Schedule I, II & III) will be required to obtain a license from the state government at a nominal fee.

This order introduces licensing and control regulations for trade articles to maintain quality standards and regulate the distribution and sale of various products.

Section 3 of the Himachal Pradesh Trade Article (Licensing and Control) Order, 1981, states: “No dealer shall, after the commencement of this order, carry on the business of purchase, sale, or storage for sale of any trade article mentioned in Schedule I except under and in accordance with the terms and conditions of a license issued by the Licensing Authority. A dealer who stores or sells trade articles in quantities not exceeding the limits prescribed by the State Government may be exempted from obtaining a license. Existing license holders under previous licensing Orders mentioned in Schedule III may obtain a license under this Order within 30 days of its commencement.”

Commenting on this move, an income tax lawyer acknowledged that these acts/laws will give the State of Himachal better control over its markets and provide additional revenue for the state government. However, the impacts of charging a license fee on small retailers/shopkeepers, who are already facing challenges from e-commerce and have been affected by the lockdown, etc, remains to be seen.