Grant of Incentives by Government under EXIM Policy Is Not A 'Service' Within The Meaning Of Consumer Protection Act: SC

Grant of Incentives by Government under EXIM Policy Is Not A ‘Service’ Within The Meaning Of Consumer Protection Act: SC

August 27, 2019

In the matter of ‘The Secretary, Ministry of Commerce & Ors. Vs. M/s Vinod and Company’ judgment dated July 11, 2019 arising out of Civil Appeal No(s). 5399 of 2019 and SLP(C) No. 30529/2013, the bench comprising of Justice Dhananjaya Y. Chandrachud and Justice M.R. Shah considered the issue whether a person who has made a claim as a holder of REP License (Replenishment (REP) License) issued in terms of the import and export policy is a ‘Consumer’ within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986.
The principal issue that was canvassed before the SCDRC and in revision was that the consumer fora had no jurisdiction to entertain a consumer complaint on the ground that no service is rendered by the Union government when it provides incentives under the Exim policy.

The National Commission Disputes Redressal Commission (NCDRC) had rejected the contention that the consumer forum had no jurisdiction to entertain a consumer complaint on the ground that no service is rendered by the Union Government when it provides incentives under the Exim Policy.

The Supreme Court made a specific observation that “The objects of the policy are essentially to stimulate industrial growth by providing easy access to imported capital goods, raw materials and components, to substitute imports and promote self-reliance and to provide an impetus to exports by improving the quality of incentives. The Exim policy is an incident of the fiscal policy of the State and of its overall control over foreign trade. As an incident of its policy, the State may provide a regime of incentives. The provision of those incentives does not render the State a service provider or the person who avails of the incentives as a potential user of any service. The State, in exercise of its authority to utilize and collect revenue, puts in place diverse regulatory regimes under the law. The regime may provide for modalities for compliance, penalties for breach and incentives to achieve the purpose of the policy. The grant of these incentives does not constitute the State as a service provider”.

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