Highlights of Consumer Protection Act 2018

Sep 21, 2023

Consumer Protection Act, 2018 implemented on September of 2018, is the relevant act in Nepal in order to protect the interest of consumers regarding the quality, quantity and price of the consumer goods and services. The Act has tried to address the shortcomings of the Consumer Protection Act, 1998. Some of the major highlights of the Consumer Protection Act 2018 are as follows:

Redefining Service

The existing and the previous Consumer Protection Acts both consist of the legal provisions for the protection of consumer who consume any goods or services. However, existing Consumer Protection Act has not only limited such services to labor, facility or consultancy but recognizes services such as electricity, drinking water supply, telephone, information technology, health, education and consultation, transport, drainage, banking or other services of similar nature, including legal, medical or engineering services.

Other Parties

Furthermore, unlike previous Act, Consumer Protection Act 2018 is not only limited to rights of consumer but also provides liability of parties associated to marketing of goods or services which include producer, importer, carrier, hoarder, seller and service provider under Chapter 3 of the Act. The existing Act has defined such parties, their liabilities and means of legal remedies.

Regulation of Goods or Services

The previous Act provided very little as to how the goods or services were to be regulated. The Consumer Protection Act 2018 has elaborated in this regard. Pursuant to Section 4 of the Act, Government of Nepal shall perform various functions from implementing policy, facilitating the supply system, coordinating with concerned agencies, etc. in order to regulate the supplies, price, quality, measurement, label and advertisement of the goods and services.

Affix Label

Affixing label mentioning various particulars regarding the goods is a requirement under both the existing and the previous Acts. However, the existing Consumer Protection Act prohibits import, sale and distribution of goods on which label is not affixed pursuant to Section 6 of the Act.

 Prohibited Activities

Chapter 4 of the Consumer Protection Act 2018 prohibits various activities in order to protect consumers. The Act has tried to address the shortcomings of the previous Act by elaborating and extending the prohibited activities. Some of which are as follows:

  • To conduct unfair trade and business activities:
  1. The Act elaborates on the unfair trade and business activities which include:
  2. Selling or providing goods or services by lying, concealing or hiding,
  3. Creating artificial shortage of, hoarding or selling any goods,
  4. Refusing to issue bill or invoice of the sold goods or service or not issuing bill or invoice,
  5. Providing service without specifying the price, quality of service, etc.
  • To cause adverse impact on demand, supply or price:

Distribution, transport, or hindering the sale and distribution of any goods by taking profit higher that that prescribed and over the cost invested in the production, import, transport, hoarding or selling and distribution of such goods is prohibited by the Act.

  • Producing, selling or importing sub-standard goods knowingly,
  • Selling any goods or services by lying or deceiving that the goods or services are other goods or services and stating high standard goods or services,
  • Producing or selling the goods or service that cause adverse impact upon the health of consumer.

Relevant Authorities

The relevant government authorities in the previous Consumer Protection Act were limited to Consumer Protection Council, District Court, Appellate Court and Compensation Committee. The existing Act has removed the provision regarding Compensation Committee and extended the relevant government authorities of Nepal for the consumer right protection. They are listed below.

  • Ministry of Industry, Commerce and Supplies
  • Department of Commerce, Supplies and Consumers Welfare Protection Department
  • Consumer Protection Council
  • Central, Provincial and Local Market Monitoring Committee
  • Consumer Court
  • District Court

Making a complaint

The previous Act provided for the complaints to be filed with the Compensation Committee. However, there is no Compensation Committee under the existing Act. It provides that any complaint be filed in writing or orally or even through electronic means to the Central Marketing Monitoring Committee, Department or Inspection Officer, along with the information or proof and evidence under his or her custody.

Filing Lawsuits

Any Lawsuits related to offences punishable under the previous Act was to be filed with the concerned district court. However, Consumer Protection Act 2018 provides for the constitution of Consumer Court in order to try and settle cases or complaints. Such cases and complaints are transferred to the concerned district court only if the Consumer Court gets dissolved by the Government of Nepal.


Pursuant to the previous Consumer Protection Act, consumer suffering loss or damage could file a complaint with Compensation Committee for Compensation. However, the existing Act provides that such complaints for realization of compensation are to be filed at the Consumer Court.

Reward to informant

The existing Act also provides for reward of ten percent of the claimed amount recovered or one million rupees, whichever is the lesser, to the person who provides information that the offence has been or is going to be committed. There were no such provisions in the previous Act.

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