Conditions for Setting Up & Conduct of Direct Selling Business in Karnataka

Conditions For The Setting Up And For Conduct of Direct Selling Business In State of Karnataka

CONDITIONS FOR THE SETTING UP OF DIRECT SELLING BUSINESS:

-Every Direct selling entity carrying out or intending to carry out direct selling business in India shall submit an application to the Department of Consumer Affairs.

-Direct selling entity shall be a registered legal entity under the laws of India.

-Direct selling entity shall provide a mandatory orientation session to all prospective direct sellers.

-Direct selling entity shall notify and provide a full refund or buy-back guarantee to every direct seller on reasonable commercial terms which can be exercised within a period of 30 days from the date of the distribution of the goods or services.

-Direct selling entity shall notify and provide to every direct seller a cooling-off period which entitles such direct seller to return any goods/ services purchased by the direct seller during the cooling-off period.

-The promoter or key management personnel should not have been convicted of any criminal offence punishable with imprisonment in last 5 years by any Court of competent jurisdiction etc.

CONDITIONS FOR CONDUCT OF DIRECT SELLING BUSINESS:

• Direct selling entity shall issue proper identity document(s) to its direct sellers.
• Direct selling entity shall maintain proper records either manual or electronic of their business dealings, with complete details of their goods, services, terms of contract, price, income plan, details of direct sellers etc.
• Direct selling entity shall maintain proper and updated website with all relevant details of the entity.
• Direct selling entity shall monitor the value of the purchases of all its direct sellers/distributors on a monthly basis and once the purchase value crosses the VAT/GST threshold; it must intimate the direct seller/distributor to pay the VAT/GST and other Taxes etc.

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