Unfair Gaps🇮🇳 India

Wholesale Building Materials Business Guide

4Documented Cases
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All 4 Documented Cases

बीमा दावे अस्वीकृति और आंशिक क्षति निपटान

₹3-8 lakhs/annum (average claim value ₹50,000; rejection rate 15-25%; settlement delay 60-90 days = ₹1-2 lakhs working capital cost); 20-30 hours/incident for claim investigation and documentation

Insurance claims for damaged goods in warehouses are subject to policy exclusions (gradual deterioration, seepage, acts of war). If investigation finds the distributor's negligence or misconduct as proximate cause, insurers reject claims entirely. Even where approved, settlement delays of 45-90 days create cash flow drag and force provisioning of receivable.

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माल परिवहन में क्षति निर्धारण और वसूली में विलंब

₹5-15 lakhs/annum working capital drag (average claim ₹100,000; 5-10 unresolved claims/year; 120-day avg. settlement cycle = ₹1.5-4 lakhs opportunity cost); 40-60 hours/incident for claim investigation, correspondence, and court filing

Under Sale of Goods Act 1930, when goods are damaged in transit, liability depends on whether risk has passed to the buyer, carrier's duty of care, and evidence of negligence or force majeure. Manual claim process requires photo evidence, witness statements, and often civil court intervention. Settlement negotiation between supplier, distributor, and carrier can extend 6+ months.

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उत्पाद दायित्व और रिकॉल दावों के तहत अनुपालन जोखिम

₹2-6 lakhs/annum contingent liability (estimated ₹30,000-₹150,000 per defect claim; 10-15 unresolved claims/year); ₹50,000-₹300,000+ in consumer court judgments plus interest (7-12% p.a.); 25-40 hours/month legal and claim administration

Under CPA 2019, both product manufacturer and product seller (distributor) are liable for defective goods. Defect is broadly defined as fault, imperfection, or shortcoming. Distributors must replace, refund, or repair without waiting for manufacturer indemnification. Weak contractual indemnity provisions from manufacturers and slow insurance claim processing leave distributors bearing costs. Additionally, product recall does not preclude ongoing liability claims for already-sold products.

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क्षतिग्रस्त माल दावों पर GST कर योग्यता अनिश्चितता

₹25,000-₹500,000 per audit (GST penalties 10-40% of unpaid tax + interest); ₹2-5 lakhs annual cumulative exposure for mid-size distributor; 15-25 hours/month manual invoice review and rectification

GST on liquidated damages from damaged goods claims depends on contractual substance. If payment merely compensates loss without tolerating a breach, GST does not apply. If payment is consideration for allowing delay or refraining from action, GST applies as service supply. Lack of explicit agreements causes misclassification, leading to notices from GST authorities, ITC reversal, and penalties.

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