Celebrities endorsing misleading advertisements can be jailed for up to five years and face a fine of Rs 50 lakh under a new draft law, which will be taken up by a group of ministers on Tuesday.

A group of ministers, headed by Finance Minister Arun Jaitley, is scheduled to meet on Tuesday to discuss the changes proposed by the Consumer Affairs Ministry in the draft law before placing it for the Cabinet approval.

According to sources, the ministry has proposed stringent provisions to tackle misleading advertisements as well as to fix liability on endorsers/celebrities.

"For the first time offence, a fine of Rs 10 lakh and jail term of up to two years, while for second and subsequent offenses, a fine of Rs 50 lakh and imprisonment of five years has been proposed for brand ambassadors," a source said.

The ministry has proposed similar penalty and jail term for adulteration, besides license suspension and cancellation.

The ministry has also accepted the panel's recommendation to include 'deficiency in services' in product liability.

It has agreed to provide an enabling provision to make rules to regulate e-commerce and direct selling.

It also seeks to remove overlap of powers of Central Consumer Protection Authority (CCPA) and the Consumer Fora. An investigating wing will be set up at CCPA, while limiting the role of a district collector to support CCPA in investigation.

It has also removed a provision for penalty on consumers for frivolous complaints.