BISHESHWAR MISHRA
The Central Consumer Protection Authority (CCPA) has penalised M/s Digital Age Retail Pvt. Ltd. (FirstCry) with a fine of ₹2 lakh for engaging in false and misleading price representations on its e-commerce platform.
The order, passed under Sections 10, 20 and 21 of the Consumer Protection Act, 2019, came after a consumer complaint highlighted deceptive discount practices on www.firstcry.com.
According to the complaint, FirstCry displayed product tags reading “MRP inclusive of all taxes”, but at the checkout stage, an additional GST was charged on the discounted price. This practice created a false impression of deeper discounts, ultimately misleading consumers about the actual payable amount.
The CCPA concluded that such conduct amounted to misleading advertisements and unfair trade practices, warranting the monetary penalty.
The investigation supported by data from the National Consumer Helpline (NCH), showed that the practice of advertising discounts on the MRP but separately charging GST on the discounted price significantly reduced the benefit to consumers. For example, products advertised with a 27% discount were effectively sold at only an 18.2% discount after GST was applied. Such representations were found to amount to deceptive pricing, misleading advertisements under Section 2(28), and unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019.
It was observed that disclaimers such as “additional charges may apply” or “GST and Add’l charges may apply on discounted price” did not override the statutory requirement that the MRP must be inclusive of all taxes. By representing the price as tax-inclusive and then levying GST at checkout, the company engaged in “drip pricing,” a dark pattern under the Guidelines for Prevention and Regulation of Dark Patterns, 2023, which misled consumers about the final payable amount and undermined informed decision-making. Such practice also contravened Rule 7(1)(e) of the Consumer Protection (E-Commerce) Rules, 2020, which requires the total price, inclusive of all charges and taxes, to be displayed upfront. The CCPA therefore directed the company to rectify this practice and ensure that both original and discounted prices are shown as inclusive of all taxes, with any additional charges clearly disclosed.
In view of the company’s extensive operations and its stature as one of the largest online retailers for maternity, baby, and children’s products in India and Asia, the impugned practice was observed to have a significant and widespread impact on consumers. Accordingly, the CCPA has directed the company to ensure that both original and discounted prices are always shown as inclusive of all taxes, and that any additional charges such as shipping or convenience fees are prominently disclosed. It has further directed that the misleading practice, though now discontinued, must never be adopted in the future.
Following CCPA’s intervention, the company has rectified its platform to provide more transparency in the display of prices across the company’s website and mobile application. Also, a prominent display of the disclaimer ‘price inclusive of all taxes’ is put across all pages of the Website and mobile application of the Company. The changes are live on the Company’s platform and clearly reflect that no GST will be charged on the discounted price and the price displayed after discount across all pages is final price of the product inclusive of all the taxes.