You are on page 1of 5

CENTRAL MARKS DEPARTMENT-II(LEGAL)

Our Ref.: CMD-II(L)/G-18

Dated: 21/11/2014

Subject: Modified policy for Fixation of Marking Fee.


Background
During the 104th meeting of EC while reviewing the product certification scheme, the
following was decided (refer item 2.5.ii of the proceedings of the meeting):
a) Rationalise marking fee under product certification scheme wherever it was lower than the
expenditure incurred by BIS in operating the licence.
2. Subsequently during the meeting of Marking Fee Committee held on 12th Dec 2011, the
following was decided by the committee under item 4- Rationalisation of minimum Marking
Fee based on fixed overhead of BIS, which is reproduced below:
4.1 Committee felt the need of rationalizing the Minimum Marking Fee of products
which at present is less than Rs 29000/- after 15% discount. HCMD-II and HCMD-III
apprised committee of products which have Minimum Marking Fees below Rs 29000/- after
allowable discount to SSIs. As per the list, there are 822 Indian Standards in which Minimum
Marking fee is found to be less than Rs 29000/- after allowable discount to SSI units.
4.2 It was discussed that the minimum fixed overheads of Rs 29000/- was as per the
calculation made in the year 2006, without taking into account the components which have
increased after implementation of sixth pay commission. The present fixed over heads of
certification activity are far more than 29000/-. Moreover cost of consumables, electricity
charges etc have also increased many folds since last revision.
4.3 In view of the above, committee decided that the minimum marking fee of 822
Indian Standards which is below 29000/- for Small Scale Industries may be enhanced to
29000/- and for Large Scale units MMF may be raised by 15% in order to allow 15%
discount to SSI units. This will bring minimum marking fee at par with minimum fixed
overheads of BIS (of year 2006). With the above increase, Minimum Marking Fee will still be
less than the overheads which BIS is currently incurring in providing services to the
licensees. Further, testing charges of four samples and cost of purchase of two market
samples are also not taken into account in above increase.
4.4 Committee desired that CMD may prepare consolidated proposal of Minimum
marking fee of the above mentioned 822 Indian Standards as above guideline, for putting up
to competent authority for approval.
3. As a result in the year 2012 the marking Fee for 822 products were reviewed.
Present
4. During the review of the minutes of the Marking Fee Committee held on 29 Sep 2014 and
issue regarding concession being given to the Industry, DG has directed that the Marking Fee
shall be reviewed for all such cases where MF for SSI units are less than or equal to the

effective overhead charges of BIS, i.e. Rs 29,000/-. Accordingly an exercise was initiated by
CMDII(L) to review the Marking Fee of all products where the Marking Fee is not as per the
following Methodology:
Ideal MMF = Overhead charges + Cost of 2 MS + Testing charges of 4 samples (2 FS & 2
MS)
5. While applying the policy it was observed that in some cases the 20% concession would
entail the manufacturer to a MMF which would be less than Rs.29,000/-. Accordingly the
matter has been reviewed once again by Competent Authority and the following is proposed.
Proposal
6. Where the Marking Fee is Rs.29,000/-, BIS is actually not charging the licensee for the
cost of market sample, cost of testing charges of the samples to be tested. Accordingly, the
revised proposal is being based in line with the decision of Marking Fee Committee held on
12/12/2011.
7. The effective overhead charges as on date is Rs.29,000/- which is being taken into account
for calculation of Marking Fee for all products. Overhead cost for Large scale units be taken
as 1.25 times the actual overhead charges so that on concession of 20% the overhead charges
does not come below Rs.29,000/-. As such the Overhead charges for Large scale units comes
out to be Rs.36,250/- rounded up to the next thousand to Rs.37,000/- as per the marking fee
fixation policy decided in 2010.
8. The calculation of Marking Fee shall therefore be as follows:
i.

Marking Fee for Large Scale= Rs.37,000 + Cost of 2 Market Sample + Testing
charges of 4 samples (2 FS & 2 MS)

ii.

Marking Fee for MSME = 80% of Marking Fee for Large Scale (after giving 20%
concession on large scale marking fee).

(Note: Marking Fee per Unit shall be capped at 0.2% of the sale value/ex-factory price of the
product).
9. Revised MF calculation format has been approved for revision of Marking Fee as well as
for Marking Fee proposal of new products which is at Annex-A.
10. Since revision of Marking Fee for products being revised, the concession to MSME unites
may be aligned with the revision of the products in three phases:
i. Phase-I: All new proposals shall be made considering 20% concession in MF with
immediate effect.
ii. Phase-II: The present MF revision exercise (for products where the MMF for LS &
MSME units are Rs34,000/Rs.29,000 respectively) shall be done by taking into
consideration the 20% concession to MSME units. This exercise of identification of
all such products and refixing their MF shall be completed by 31 Dec 2014. The

iii.

revised MF may be made effective from 01/04/2015 in order to enable BOs to make
calculations for all licences for calculation and recovery of dues.
Phase-III: The remaining products shall be reviewed for refixing of MF based on the
new policy and concession to MSME units shall be enhanced to 20%. The revised MF
may be made effective from 01/07/2015 in order to enable BOs to make calculations
for all licences for calculation and recovery of dues.

11. Submitted for kind consideration and further orders on the issue please.

sd/- 21.11.2014
( S Basu )
Sc-D

HCMCDII(L) sd/- 25.11.2014


DDG(Cert) sd/- 26.11.2014
DG approved, sd/- 26.11.2014

Annex-A
PROPOSAL FOR MARKING FEE (For All India First case, as w
1

Sl. No.

IS No.

No. of
Existing

Average
Annual
production
capacity of

Description
of the
Licences Note
Product
2

firm Note 2
(in Rs)

10

11

12

13

Inspection Total cost to


Cost to firm,
Market Price
Testing
Supervision
Market Cost
BIS (col
Unit of
per unit of Sample Size
of one
Charges for
overheads
of 2 samples
10+Col
Production production for testing sample (in
4 Samples
for LS
(in Rs)
11+Col+12)
(in Rs)
Rs)
(in Rs)
(in Rs)
(in Rs)Note1

1
2
3
4
5
6
7
8
9

Note 1: Col.11 - cost of inspection/supervision, administration cost for LS units to be taken as Rs.37000/Note 2: Col 4 is for Revision cases and col 5 is for All India first cases
Note 3: Marking Fee Concession to MSME shall be taken as 20%
Note 4: Marking Fee per unit of production shall be capped at 0.2% for all cases

, as well as for revision of existing)


14

15

Proposed
Existing
MARKING
Marking Fee Fee per Unit
per Unit of
of
Production, production,
for LS
for LS
(in Rs)

16

17

Proposed
Marking fee
% Increase
as % of Sale
(col 15-col
value/ex14)/col
factory price
14)x100}
(to be capped
at 0.2%)Note 4

18

Existing
Marking
Fee, LS (in
Rs)

19

20

Existing
Proposed
Marking
Marking FEE
Fee, MSME
, LS (in Rs)
(in Rs)

21

22

23

24

Proposed
% Increase
Marking
% Increase
in minimum Remarks (if
Fee, MSME in minimum
marking
any)
Note 3
marking (LS)
(MSME)
(in Rs)

25

Proposing
BO