H.P. Khadi and Village Industries Board Government Policy

A. Aims and Objectives Related to Government Policy

  • To implement uniform commission rates for various sales units of the H.P. Khadi and Village Industries Board (HPKVIB) in dealings with Government Departments or Semi-Government Bodies.
  • To enter into agreements for joint operations on the sales front and profit-sharing with any company, firm, or person carrying on or engaged in manufacturing or business activities that could be handled conveniently through the HPKVIB marketing network, including government-related sales.
B. Scope of the Policy
I. Private Consignors Procuring Orders on Behalf of HPKVIB

Sales where orders are procured and executed by consignors for Government Departments or Semi-Government Bodies (with or without Minimum Sales Guarantee)

  • Sales through participation in open tenders or quotations published in the press (Non-MSG).
  • Sales through participation in restricted tenders or quotations not published in the press (Non-MSG).
C. Operational Modalities
I. Rates of Commission/Handling Charges

The following commission rates are proposed for government-related sales, considering sales prospects and market competition:

  1. The Board shall charge a 10% commission on the sale of products of Government Departments or Semi-Government Bodies (Non-MSG).
  2. For sales where orders are procured and executed by consignors (Non-MSG) through a tender process, the Board shall charge commissions as follows:
  1. Supply orders up to Rs. 2 Lakhs: 10%
  2. Supply orders from Rs. 2 Lakhs to Rs. 10 Lakhs: 8%
  3. Supply orders above Rs. 10 Lakhs: 5%
D. Terms and Conditions
  • Handling charges/commission shall be calculated on net sales.
  • Earnest Money Deposits (EMD) and all incidental charges for tenders quoted to HPKVIB shall be deposited/paid by the consignor. HPKVIB shall not pay interest on EMD.
  • Samples and test reports, where required, shall be submitted at the consignor’s cost and risk. One set of counter samples and test reports shall be retained by the concerned Incharge, free of cost, and returnable upon successful execution of the order.
  • All expenses, including taxes, freight, transportation, and other incidental costs (including insurance), shall be borne by the consignor. Goods shall be supplied by the consignor on a “for sale units/destination” basis.
  • Accounts shall be settled with consignors on a monthly basis. Consignors shall submit a detailed, certified sales statement, tallied with the cash memo book, to the Incharge by the 5th day of each month. Due sale proceeds, after deducting the agreed commission, shall be released by the Incharge via payee account cheque, demand draft, or online transfer. Demand draft charges shall be debited to the consignor. Consignors may provide an account number for online payments.
  • HPKVIB shall extend marketing facilities to consignors purely on a consignment basis and reserves the right to terminate the sale of products after giving one month’s notice.
  • Any disputes regarding marketing arrangements shall be resolved through mutual negotiation or in the local courts within the jurisdiction of the HPKVIB sales unit.
  • The consignor’s income tax, sales tax, or VAT matters must comply with relevant laws.
  • Consignors must obtain CST, GST, or TIN numbers where applicable.
  • Bills and proforma bills shall be issued only by HPKVIB personnel.
  • All expenses related to credit card sales, including verification costs, shall be debited to the consignor. The consignor shall ensure the validity of credit card transactions.
E. Code of Conduct

Product clashes must be avoided.

The credibility of consignors is of paramount importance to HPKVIB.

The quality of products sold through HPKVIB must be marketable and not inferior to similar products in the market.

Where applicable, selling prices must align with the listed Maximum Retail Price (MRP) and be comparable to similar products in the market.

HPKVIB reserves the right to regulate the selling price of consignor products to prevent excessive profiteering.

HPKVIB has a discount schedule, and consignors shall harmonize their discounts accordingly.

Confidentiality of sales terms, commissions, and agreements between consignors and HPKVIB must be maintained. Business matters learned during the association shall also remain confidential.

Consignors shall maintain a register of their stock, which HPKVIB reserves the right to inspect as per the agreement.

Accurate product information must be conveyed to customers. Misleading or exaggerated claims shall be avoided. Consignors shall not pressurize customers, and the showroom’s ambiance must be maintained.

Consignors shall maintain decorum in the sales unit and avoid adverse commentary on products, displays, management, or staff. Suggestions or information shall be discreetly provided to the concerned Incharge. Only authorized personnel shall manage the sales counter.

Consignors’ personnel must maintain harmony with HPKVIB staff. Grievances shall not be raised directly with HPKVIB headquarters without first addressing the concerned Incharge. A written representation, with a copy to the Incharge, may be sent to headquarters if needed.

State guests, VIPs, or senior government officials may visit sales units, sometimes unannounced. These dignitaries shall be attended by the concerned Incharge or the second-in-charge if the Incharge is unavailable. Consignors may assist as permitted by the Incharge.

HPKVIB may conduct publicity campaigns through audio, video, or print media, including consignor products. Consignors shall share the costs proportionately in consultation with the Incharge.