Rules for Direct Selling – MLM companies recommended by Strategy India (2019)

1.1 Short title and commencement

1.1.1 These Rules may be called the Direct Selling Rules, 2020

1.1.2 It shall come into force with immediate effect from the date of its notification in the official Gazette.

1.2 Definitions

In these Rules unless the context otherwise requires:-

"Act" means the Consumer Protection Act, 2019 (Central Act)

"Consumer" shall have the same meaning as provided under the Consumer Protection Act, 2019

"Person" shall have the same meaning as provided under the Consumer Protection Act, 2019

"Prospect and/or Prospective" means a person to whom an offer or a proposal is made by the Direct Seller to join a Direct Selling opportunity or purchase a product/service

"Goods" means every kind of movable property and includes "food" as defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006 and "Service" means service as defined in the Consumer Protection Act, 2019 (Central Act)

"Price" is the money consideration for a sale/purchase of goods.

"Direct selling" means marketing, distribution, and sale of goods or provision of services through a network of sellers, other than through a permanent retail location/s.

"Direct Selling Entity" means a body corporate including an One person company, limited liability partnership, Private limited, Limited company engaged in the business of Direct Selling.

"Direct Seller" is a person above the age of 18 years on the date of enrolment with eligibility to enter into a business contract who enrols with the direct selling entity through a legally enforceable contract to undertake direct selling business on principal to principal basis for purchasing the goods at a discount for self-consumption and/or an opportunity to earn income by retailing goods and/or by helping others join the direct selling business to earn money by doing the same.

A direct seller may be a consumer/user or a customer/purchaser/buyer or a reseller or all of the three.

Explanation: - That a 'contract' includes e-contracts or digital contracts and the same shall be governed as per the provisions of the Information Technology Act, 2000 as amended from time to time.

"Marketing organization" is the way of representing the tiered nature of persons in a graphical form to help them recognize their relative positions to the direct selling entity or the persons above or below them.

This arrangement is also known as the Tree structure or Network Structure.

"Saleable" with respect to goods or services, shall mean, unopened, unused, of merchantable quality and marketable, which has not expired, and which is not discontinued or goods or services of special promotion/s or the ones offered free or at token price.

"Satisfaction guarantee" is the promise to the customer/consumer (includes persons associated with the company as a part of the marketing organization or persons not the part of the marketing organization) to empower him/her to return the good/s if he/she does not get the results as per the expectations or as promised/claimed by the company.

"Buy back/Money back guarantee" is the promise to the persons associated with the company/customers/consumers to empower them to return the goods if they are unable to sell the purchased product/s to the consumer/s alternatively, unable to use them for selfconsumption.

"Cooling-off Period" means the duration of time counted from the date when the direct seller and the direct selling entity enter into an agreement as per the terms stated in these Rules and ending with the date on which the contract is to be performed and within which the direct seller may repudiate the agreement without being subject to penalty for breach of contract.

"Pyramid Scheme" means a multi layered network of persons to a scheme formed by persons enrolling one or more persons in order to receive any benefit, directly or indirectly, as a result of enrolment, action or performance of additional persons to the scheme. The persons enrolling further persons(s) occupy higher position and the enrolled persons(s) lower position, thus, with successive enrolments, they form multi-layered network of persons known as a marketing organization:

Provided that the above definition of a "Pyramid Scheme" shall not apply to a marketing organization of persons formed by a Direct Selling Entity, which consists of persons enrolling one or more persons in order to receive any benefit, directly or indirectly, where the benefit is only a result of sale of goods or services by persons and the business model complies with all of the following:-

• It has no provision that a person will receive remuneration or incentives for the mere act of recruitment or enrolment of new participants;
• It does not mandatorily require a participant to purchase goods or services for an amount that exceeds for which such goods or services can be expected to be consumed by, or sold or resold to consumers and/or for a quantity that exceeds that for which such goods or services can be expected to be consumed by, or sold or resold to consumers;
• It does not require a person to mandatorily pay any entry or registration fee, cost of sales promotion equipment and materials or other fees relating to participation;
• It provides a participant with a contract describing the "material terms" of participation;
• It allows or provides for a buy-back or repurchase policy for saleable goods or services sold to the person within 30 days of delivery of the goods to the person at the request of the person at the at reasonable terms;

Explanation :- For the purposes of this proviso, the term "material terms" shall mean buy- back or repurchase policy, resignation policy, Code of conduct, cooling-off period, warranty and refund policy.

"Compensation plan" is a technique to calculate the commissions/incentives and/or the rewards to be given to/among person/s from the turnover of sales of goods or services by them personally and/or their persons in their marketing organization.

This system, for every Direct Selling entity, shall

• Have no provision that a person will receive any remuneration from the act of recruitment of new persons
• Ensure that the persons shall receive remuneration derived from the sale of goods or services.
• Clearly disclose the method of calculation of compensation with at least two relevant illustrations per income
• Publicly display the turnover of the company if all/any income is linked to the turnover of the company;

"Regulating Authority" means such authority, entity or institution having the relevant jurisdiction under these Rules as designated or specified by the Central Government.

"State" includes Union Territories also.

"Rules" means the Direct Selling Rules, 2020.

Words and expressions used in the Rules and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act.

Any trading, marketing, distribution or sale of goods and services not adhering to the Conditions and Restrictions under this Chapter would be dealt accordingly both under these Rules as well as under the relevant laws.

2.1 Conditions for any entity intending to set up Direct Selling business

2.1.1 Any entity intending to carry out direct selling business in India, shall comply with the following set of conditions for the conduct of direct selling business:-

• It shall be a registered legal entity under the extant laws of India
• The promoter or key management personnel should not have been convicted of any criminal offence punishable with imprisonment of one or more years in preceding five years by any Court of competent jurisdiction
• It shall be the owner, holder, licensee of a trademark, service mark or any other identification mark which identifies the entity with the goods to be sold or supplied or services to be rendered
• It shall be registered with the Goods and Services Tax Authority with a unique Good and Services Tax Identification Number
• It shall maintain proper and updated website with all relevant details of the entity, contact information including postal/correspondence address and address of the current head office and offices in various states email address and contact numbers, brief profile of its top management personnel in India, products, product information & price, compensation plan with illustrations explaining all types of potential incomes and rewards, terms of contract with the direct sellers and complaint redressal mechanism. The website should have a system for registering complaints and should ensure that grievances are addressed within forty-five days of making such complaints
• It shall have one or more fully functional permanent place(s) of business in India and adequate arrangement either digitally as stated in sub-clause (5) above or in physical location to satisfy the consumers, and direct sellers to acquaint themselves with price of products, return or replacement of products, efficient delivery of goods and services and post-sale redressal of grievances
• It shall provide accurate and complete information to prospects and existing direct sellers concerning the compensation plan and related rights and obligations
• It shall clearly and transparently disclose(in public domain- without the need for passwords or any type of verification) the turnover (in real time) if any/all of the income/reward/incentive committed is/are linked directly or indirectly to the turnover
• The payment of commissions/incentives should be made without fail and delay to the persons associated as per the commitments of the compensation plan followed by the company
• Product Claims - all the claims made by the company (on the official website and literature, including brochures, packaging, and labels) for the products should be supported by evidence in the form of certifications from competent authorities (e.g.laboratories)
• It shall notify and provide a full refund or buy-back guarantee to every person on reasonable commercial terms which can be exercised within a period of thirty days, from the date of the delivery of the goods or services to the person
  Explanation:- For the purposes of this proviso, the term "Reasonable commercial terms" means:
  Not more than 15% may be deducted from the amount as an administration fee, restocking fee, or by any other name which was paid by the person to the company for purchasing the good/s which were returned.
• It shall notify and provide a full refund or satisfaction guarantee to every person on reasonable commercial terms which can be exercised within a period of thirty days in case of services and fifteen days, from the delivery to the person
  Explanation:- For the purposes of this proviso, the term "Reasonable commercial terms" means:
  In case of Goods: Not more than 15% may be deducted from the amount as an administration fee, restocking fee, or by any other name which was paid by the person to the company for purchasing the good/s which were returned.
  In case of Services: Not more than 5% may be deducted from the amount as an administration fee, or by any other name which was paid by the person to the company for purchasing the service/s which were returned.
• It shall notify and provide a full refund or satisfaction guarantee to every person on reasonable commercial terms which can be exercised within a period of thirty days in case of services and fifteen days, from the delivery to the person
  Explanation:- For the purposes of this proviso, the term "Reasonable commercial terms" means:
  In case of Goods: Not more than 15% may be deducted from the amount as an administration fee, restocking fee, or by any other name which was paid by the person to the company for purchasing the good/s which were returned.
  In case of Services: Not more than 5% may be deducted from the amount as an administration fee, or by any other name which was paid by the person to the company for purchasing the service/s which were returned.
• It shall provide an option of undergoing an orientation session in person or through electronic / digital means to all prospective persons providing fair and accurate information on all aspects of the direct selling model followed by the entity, including but not limited to the compensation plan and illustrations explaining all the income types in the compensation plan for newly recruited persons
  Explanation: The orientation will be provided by the Direct Selling Entity or by a Direct Seller or by any authorized representative of Direct Selling Entity, either in person or through any electronic or digital means.
• The entity should not provide commitments of returns on investment/s (on purchase of good/s or without the purchase of good/s) in the form of interest, salary, loan, help, donation, market development fees and support fund to/through the persons , to any person/s.
• The entity should not generate or pay-out or commit commissions/incentives against part payment or advance received against the sale or future commitment to sell any good/s or service/s.
• The company should not deduct any charges except Tax deducted at source from payouts of the persons.
• No commissions/incentives and/or rewards should be generated/paid out on purchase/retail marketing/promotional material/Events including Brochures. Posters, Audio/Video media and Event passes/tickets
• Calculations for all the illustrations used for explaining the compensation plan (online and offline) should be done and shown in Indian rupees only

3.1 Conditions for Direct Selling Entity carrying out business

3.1.1 Every Direct Selling entity which is carrying out the direct selling business in India, shall comply with the following conditions: -

• It shall issue (in form of a hardcopy) proper identification document(s) to its persons in such a format that is easily legible and is clearly indicative of the association of the person with the Entity. The identification document should consist Full Name of the person , Address of the person, Contact number, ID number, Tenure of validity of the identification document , Address of the head office of the entity and Contact number of the entity where their identity may be verified (if required).
• It shall maintain proper records either manual or electronic of their business dealings, with complete details of their goods, services, terms of contract, price, compensation plan, details of the direct sellers, including but not limited to enrolment, termination, resignation, active status, marketing organization and incomes.
• It shall maintain a Record of Direct Sellers in a machine readable and printable format, wherein relevant details of each enrolled Direct Seller shall be updated and maintained; these details shall include and not be limited to verified proof of address, proof of identity(photograph and signature) and wherever applicable the Permanent Account Number.
  Explanation 1: The Direct Selling Entity should collate from the Direct Sellers any photographic ID card as issued by the State or Central Government. These ID cards could be from the following: - Aadhaar Card, Driving License, Voter ID Card, Passport and Ration Card, Student ID Card issued by a State University or any other identity document issued by the State or Central Government which can be verified. Explanation 2: The requirement of Permanent Account Number shall be as per the provisions of the Income Tax Act, 1961 (Central Act 43 of 1961)
• It shall provide to all direct sellers their periodic account or information in reference to their sales, purchases, and their marketing organization along with the details of 8 earnings, commissions, bonus and other relevant data as applicable, in electronic form and/or in accordance with the terms of the agreement with the direct sellers.
• It shall provide training, promotional or demonstration materials, catalogues and brochures to the direct sellers at reasonable cost.
• Subject to compliance of applicable laws and policies, it shall be entitled to sell the products and or services digitally and or from its authorised physical location directly to the Consumers.
• All transactions including the pay-outs of compensation to the direct sellers in the country should be in Indian Rupees by platforms/systems approved by the Government of India.
• It shall not generate/store/distribute/promote/use any form of currency/virtual currency.

4.1 Restrictions on the Conduct of Direct Selling entity

4.1.1 A Direct Selling Entity shall have the following restrictions on their conduct, wherein they shall not: -

• Use misleading, deceptive or unfair recruiting practices, including misrepresentation of actual or potential sales or earnings, in their interaction with prospect or existing direct sellers
• Make any representation to a prospective direct seller that cannot be verified or make any promise that cannot be fulfilled
• Present any advantages of direct selling to any prospect in a false or deceptive manner
• Make or cause, or permit to be made, any representation relating to its direct selling model, including compensation plan and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller which is false or misleading
• Make or cause, or permit to be made, any representation relating to its direct selling model, including compensation plan and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller which is false or misleading
• Use or cause or permit to be used, fraud, coercion, harassment, or unconscionable or unlawful means in promoting its direct selling practice, including the compensation plan and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller
• Require its direct sellers to provide any benefit or buy or acquire any goods or services, including entry fees and renewal fees in order to participate, other than the purchase of sales demonstration equipment or marketing materials at a resale and for which no commission, bonus or price or any other advantage will be given to any person
• Provide any remuneration to any Direct Seller for the introduction or recruitment of one or more persons as direct sellers
• Require the direct sellers to pay any money by way of minimum monthly/quarterly/yearly subscription/product purchase or renewal charges to earn commissions on sales by self or the persons in their marketing organization;
• Give commissions, bonus or incentives on sale of goods/service for which they are not the owner, holder, franchisee/licensee of a trademark, service mark or any other identification mark which identifies the entity with the goods to be sold or supplied or services to be rendered of other brands.
• Deal with following goods or services:
  • Deposits / Investments / Offered for free along with other goods / services - in / for / in the form of - Stocks, Shares, initial Public offering, Initial coin offering, Debentures, Regulated/Unregulated Currencies including Virtual currencies including but not limited to Cryptocurrencies, bullion markets, Preferential shares, Forex Trading, Plantations, Farming, Infrastructure projects, Resorts, Trading in commodities, Birds (Poultry, Emu, Quail, etc.), Livestock (Rabbit, Goat, Sheep, Cow, Buffalo, etc.), Media, Car Lease and Real Estate.
  • Crowdfunding ventures
  • Discount coupons / Vouchers / Currency ( including virtual)
  • Betting / Gambling activities
  • Quiz portals
  • Recharge portals
  • Peer to Peer transactions in any names as Support, Gift, Help, Assistance, Donations,etc.
  • Bid coupons and Vouchers
  • Websites / Web space / Bidding portals
  • Buy in to get paid - to click, to give surveys, to watch advertisements, to receive SMS and to receive emails and to invest in an advertising medium
  • Products used for intoxication
  • Any product, which exceeds its validity period/use by date/expiry date.
  • Any banned products
  • Any controlled substances
• Products to be promoted under specific conditions:
  • Gift Vouchers/Coupons - commissions/incentives to paid out only after full redemption of the vouchers/coupons.
  • Discount vouchers/coupons / promissory notes - commissions/incentives to be paid out only for the purchase of goods bought using the same/ full utilization.
  • Insurance - promoted only if the direct selling entity is allowed by the IRDAI or if the direct sellers selling insurance are licensed as per the norms of the IRDAI.
  • Online products including software applications/products, e-learning, websites, video emails/mails, etc. should have a money back guarantee of a minimum of 60 days after activation by the customer. In case of non-activation of an online good/service for more than 30 days, the sale would be considered invalid, after which the customer would have full right to request the money back. Activation of these type of goods/services should include confirmation via email registered to the customer and a message to the registered mobile number of the customer.
  • Holiday/Timeshares coupons/vouchers/packages - commissions/incentives to be paid out to the seller or the marketing organization after successful full redemption/utilization of the same by the consumer or after the completion of the tenure of the membership, etc.

5.1 Conditions for Direct Selling Contract

5.1.1 Every Direct Selling entity shall execute a contract, whether directly or indirectly, with Direct Sellers before their enrolment and every such contract would:

• Be in a manner consistent with Section 10 of the Indian Contract Act, 1872 (Central Act 9 of 1872)
• Include e-contracts or digital contracts and the same shall be governed as per the provisions of the Information Technology Act, 2000. (Central Act 21 of 2000)
• Grant the parties in addition to their rights and obligations emanating from the contract under these Rules or any other law in force, such rights and obligations that are coextensive with rights and obligations of the parties under the Indian Contract Act, 1872 (Central Act 9 of 1872)

5.1.2 All contracts between the Direct Selling Entity and the Direct Sellers shall be made in writing, describing the material terms of participation and shall:

• Not compel or induce the direct seller to purchase goods or services in an amount tha exceeds an amount that can be expected to be sold to consumers or consumed within a reasonable period of time
• Allow or provide the direct seller a 30 days cooling-off period in which to cancel participation and receive a refund for goods or services purchased
• Allow for the termination of contract, with reasonable notice of at least 30 days from Direct Sellers subject to the provisions of Indian Contract Act and fulfilment of obligation by both the parties as on the date of termination
• Allow Direct Selling Entity to terminate the contract where a direct seller is found to be violating any condition or its obligations stated in this Rule and or any terms & conditions of the contract.
• Allow or provide for a buy-back or repurchase policy for currently saleable goods or services sold to the direct seller at the said direct seller's request on reasonable terms(as explained in point 9).

6.1 Obligations of a Direct Seller

6.1.1 Every Direct Seller engaged in Direct Selling shall have the following the Obligations:-

• That they shall carry their identity card as issued by the Direct Selling Entity and not visit the premises of the prospect or the consumer without their prior appointment or approval
• That they shall at the initiation of a sales representation, without request, truthfully and clearly identify themselves, the identity of the direct selling entity, the nature of the goods or services sold and the purpose of the solicitation to the prospective consumer
• That they shall offer a prospect or customer accurate and complete explanations and demonstrations of goods and services, prices, credit terms, terms of payment, return policies, terms of guarantee, after-sales service
• That at the time of sale the following information (on request of the prospect or the customer) shall be provided to the prospect or customers, namely:
  • Name, address, registration number or enrolment number with Direct Selling Entity, identity proof and telephone number of the direct seller and details of direct selling entity
  • A description of the goods or services to be supplied
  • Explain to the consumer about the goods return policy of the company in the details before the transaction
  • The Order date, the total amount to be paid by the customer
  • Time and place for inspection of the sample (if available) and estimated time for delivery of goods
  • Information about their rights to cancel the order and / or to return the goods in saleable condition and avail refund on the consideration paid
  • Details regarding the complaint redressal mechanism
• That they shall keep proper book of accounts stating the details of the goods, price, tax and the quantity and such other details in respect of the goods sold by them, in such form as per applicable law or as may be prescribed under law.

7.1 Restrictions on the Conduct of Direct Sellers

7.1.1 No Direct Seller shall during the course of their engagement by the Direct Selling Entity or in their interaction with a prospect or customer ever:

Use misleading, deceptive and /or unfair trade practices

• Use misleading, false, deceptive, and /or unfair recruiting practices, including misrepresentation of actual or potential sales or earnings and advantages of direct selling to any prospect, in their interaction with prospective direct sellers
• Make any factual representation to a prospect that cannot be verified or make any promise that cannot be fulfilled
• Present any advantages of direct selling to any prospect in a false and/or a deceptive manner
• Knowingly make, omit, engage, or cause, or permit to be made, any representation relating to the direct selling operation, including compensation plan and agreement between the direct Selling entity and the direct seller, or the goods and/or services being sold by such direct seller which is false or misleading
• Require or encourage direct sellers recruited by the first mentioned direct seller to purchase goods and/or services in unreasonably large amounts
• Provide any literature and/or training material not restricted to collateral issued by the direct selling entity, to a prospect or existing direct sellers both within and outside the parent direct selling entity, which has not been approved by the parent direct selling entity
• Mandatorily require or encourage prospective or existing direct sellers to purchase any literature or training materials or sales demonstration equipment and if at all required such purchase shall not be at a cost exceeding the cost of materials.
• Make any false, misleading statement and or otherwise disparage directly or indirectly any other Direct Selling Entity, its compensation plan, and or its products.
• Shall not have more than one enrolment with a particular Direct Selling Entity.

8.1 Conduct of the Direct Selling Entity and the Direct Sellers

• Every Direct Seller and Direct Selling Entity shall be guided by the provisions of the Consumer Protection Act, 2019 (Central Act) whilst safeguarding the interests of the consumers
• Every Direct Selling Entity shall constitute a Grievance Redressal Committee whose composition and nature of responsibilities shall include but not limited to:
  • The Grievance Redressal Committee shall consist of at least three officers (employees) of the Direct Selling entity;
  • The Grievance Redressal Committee shall address complaints and inform complainants of any action taken;
  • Complaints may be made by any member of the general public against a direct seller Of the company, an employee or any other officer of the entity;
  • All such grievances will be resolved directly by the direct selling entity;
  • All complaints received over phone, email, website, post and walk-in shall have a complaint number for tracing and tracking the complaint and record the time taken for redressal;
• Direct Sellers and Direct Selling Entity shall take appropriate steps to ensure the protection of all personal information provided by a customer
• Any person who displays or sells or offers for sale, including a retailer/shop, ecommerce platform or marketplace, of any product or service of a Direct Selling Entity must have prior written consent from the respective Direct Selling Entity in order to undertake or solicit such sale or offer.
• The e-commerce platform or marketplace, or shops/retailer and the sellers/re-sellers on such platform or marketplace shall ensure that the prior written consent from Direct Selling Entity is obtained, and that no sale or offer is made, or no product or service is displayed through/on such platform or marketplace in the absence of such consent.
  Explanation:- The prior written consent that is granted by a Direct Selling Entity would not create an unalterable/irrevocable right and could be revoked by the Direct Selling Entity granting such consent, as and when required.

9.1 Relationship between Direct Selling Entity and Direct Seller

The relationship between Direct Selling entity and Direct Seller shall be determined as per the contract between the parties wherein for rights and obligations that are expressly provided under these Rules for the Direct Selling entity and Direct Seller, the same shall prevail whereas all other rights and obligations shall be determined as per the express terms of the 14 contract unless expressly provided otherwise in the contract between a Direct Selling entity and Direct Seller;

The Direct Selling entity will be liable for grievances arising out of sale of products / services as per the Act;

10.1 Prohibition of Pyramid Schemes

10.1.1 No person or entity shall promote a Pyramid Scheme, as defined in Rule 1.2 (12) of these Rules or enrol any person to such scheme or participate in such arrangement in any manner whatsoever in the garb of doing Direct Selling business.

11.1 Appointment of Regulating Authority

11.1.1 The Central Government may by notification appoint or assign a Regulating Authority for the purposes of the enforcement of these Rules as per the provisions of the Act.

11.2 Powers of Regulating Authority

11.2.1 The Regulating Authority shall have the power to ensure that upon any contravention of these Rules, appropriate action is taken and that the said contravention is remedied.

11.2.2 An offence under these Rules shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.

Explanation: The action to be taken by the Regulating Authority could be either penal or pecuniary or both, and all such action would be in consonance with the provisions of the Act without being in excess to that envisaged under the Act.

11.3 Registration of Direct Selling Entity

11.3.1 Every Direct Selling Entity shall register, within 90 days from the notification of these Rules and in case of a new Direct Selling entity within 90 days of the starting of Direct Selling business, with The Regulating Authority or such body as specified by the Regulating Authority with the following:

• A copy of the Memorandum and Articles of Association or other constituent documents under which the Direct Selling Entity is established, duly verified by an oath or declaration made by a director of the Direct Selling Entity
• A copy of the latest audited balance sheet and profit and loss account, if applicable
• A copy of Registration under GST Act
• A detailed statement on
  • The name, place and date of the establishment of the Direct Selling Entity
  • The names, places and dates of the establishment of its related corporations
  • The principal business and field of operations of the Direct Selling Entity and of its related corporations
  • The names and addresses of the directors and of the substantial shareholders of the Direct Selling Entity and its related corporations
  • The current compensation plan or the proposed compensation plan of the Direct Selling Entity in respect of that business
  • Undertaking that it is in compliance with the requirements under these Rules for a Direct Selling Entity
  • Such other information or documents as may be specified by the Regulating Authority.

11.4 Grant of Registration

11.4.1 The Regulating authority shall provide a registration certificate within 30 days on receipt of the registration application supported with documents as mentioned in Clause 11.3.1.

11.4.2 At any time after receiving an application and before it is determined, The Regulating authority may, by written notice, require the applicant to provide additional information or documents.

11.4.3 In case the Regulating Authority does not provide Registration within 30 days of submission of application or submission of response to written notice under Clause 11.4.2, whichever is later, the registration shall be deemed to have been granted.

11.5 Power of Regulating Authority

11.5.1 The Enforcement Officer, as appointed by the Regulating Authority, not below the rank of Gazetted Officer may with a view to securing compliance with this Rule; inspect or cause to be inspected the premises of Direct Selling entity, in case of violation of this Rules require any person to give any information in his possession about the goods / services of the Direct Selling entity; enter and search, with such aid or assistance as may be necessary

The Enforcement Officer shall submit the enquiry report before the Regulating Authority.

The provisions of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974) relating to search shall so far as may be, apply to searches under this order.

11.6 Appeal

11.6.1 Any person aggrieved by any order passed by the Regulating Authority may within 30 days from the date of receipt by him/her, of such order appeal against such order, to the appellate authority

12.1 These Rules will prevail over other laws

12.1.1 Unless otherwise specifically stated in this Rule, all the actions of Direct Selling Entities and Direct Sellers shall be governed by this Rule notwithstanding anything contrary stated under any other laws.

For any queries: [email protected]

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