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Any item of goods or services, which is considered as essential to the life of the community, may be “specified” as an essential commodity by the Hon.Minister In charge of the subject of Consumer Affairs Authority, acting under Section 18 of the Act, and an order to that effect would be published in the gazette of the Government of Sri Lanka Prescribing such item as a specified item. Once an item is gazette manufactures or traders shall not increase the price the price of such product without the prior written approval of the Authority. A period of 30 days is provided for the authority to examine the application for any price revision and convey the decision to the applicant company.
The examination of the cost structure pertaining to an application for a price revision of a ”specified” commodity, by making reference to supportive documentary evidence furnished by the applicant, and making recommendations to the Authority is the main function of the pricing & management division. This division is also consulted prior to introducing fiscal measures, like import duty changes, subsidies, rebates, etc. with a view to reducing prices or retain them at current levels, whenever prices are likely to escalate due to supply and demand forces.
The prices approved by the authority for any particular product may vary from brand to brand, which leaves each brand identity undisturbed depending on the special distinguishing features of a brand and the company’s marketing strategies. The objective in examining a price is to ensure that prices are not increased indiscriminately. The final objective of the pricing & management division for fair pricing to prevail by fostering competition is a guiding factor in the price determination of essential commodities.
The division is responsible to study and purpose prices for essential commodities and to make recommendations to the authority on pricing policies. The division is also required to recommend prices when entering in to agreements with manufactures and traders in terms of section 14 of the act after studying the production patterns, price trends, market conditions, International prices etc. undertaking public and private sector efficiency studies is also one of the functions of the division.
A manufacture or trader who seeks to obtain the approval of the authority shall make an application in that behalf to the authority.
Powers vested to the authority by CAA act no.09 of 2003, for regulating the pricing mechanism
|(A)||Section 14 – Agreement to provide for maximum price of good.
The authority may enter into written agreement with any manufacturer or trader or any association of manufactures or traders
To provide for
|(B)||Section 18 – prior written approval for price revision of specified goods.
Where the minister is of the opinion that any goods or any service is essential to the life to the community or part thereof, the minister in consultation with the authority may be order published in the gazette prescribe such goods or such service as specified goods or specified service the case may be.
No manufacture or trader shall increase the retail or wholesale price of any good or service specified under section 18(1) of the CAA Act, except with the prior written approval of the authority.
|(C)||Section 19 & 20 – By order published in the Gazette, fix the maximum price.
Where it appears to the Director General that any goods are being sold or any services are being provided by a manufacture or trader at an excessive price the Director General may in consultation with the Authority, refer such matter to the council for investigation and report.
On the receipt of the recommendation of council under section 20(4), the Authority shall by order publish in the gazette, fix the maximum price.
Manufacturer or Trader shall not increase the price of any specified good or services without the prior approval of the Authority. To obtain the approval of the Authority the applicant must be sent the application to the Authority.