E-Commerce Laws: Need for E-Commerce laws

07/07/2021 0 By indiafreenotes

Applicable Laws & Regulations

Regulatory Technology & Data Protection
1.     Foreign Direct Investment Policy

2.     Further, the Foreign Exchange Management Act, 1999  Companies Act, 2013

3.     Payment and Settlement Act, 2007 and other RBI regulations on payment mechanisms

4.     Labelling and Packaging

5.     Legal Metrology Act, 2009 read with Legal Metrology (Packaged Commodity) Rules, 2011

6.     Sales, Shipping, Refunds and Returns

7.     Moreover, Regulations prescribed by the relevant ministry/state regulations

1.     Information Technology Act, 2000 

2.     Additionally, Information Technology (Intermediaries Guidelines) Rules, 2011 

3.     Information Technology Act, 2000 (IT Act) and General Data Protection Regulations (GDPR).

4.     Consumer Protection Act, 1986

Tax Legal
1.     Income Tax Act, 1961

2.     Double Taxation Avoidance Agreement

3.     Good and Services Tax

1.     Indian Contract Act, 1872

2.     Indian Copyright Act, 1957

3.     The Patents Act, 1970

4.     Intellectual Property Issues

5.     Labour laws

Other Conditions include:

  • Marketplace e-commerce entities will be permitted to enter into transactions with sellers registered on its platform on a B2B basis.
  • E-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfilment, call centre, payment collection, and other services.
  • Digital & electronic networks will include a network of computers, television channels, and any other internet application used in an automated manner such as web pages, extranets, mobiles, etc.
  • An e-commerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies.
  • In the marketplace model goods/services made available for sale electronically on the website should provide the name, address, and other contact details of the seller. Post-sales, delivery of goods to the customers, and customer satisfaction will be the responsibility of the seller.
  • E-commerce entities providing a marketplace will not exercise ownership over the inventory i.e. goods purported to be sold. Such an ownership over the inventory will render the business into an inventory-based model.
  • In the marketplace model, payments for sale may be facilitated by the e-commerce entity in conformity with the guidelines of the Reserve Bank of India.
  • Similarly, In the marketplace model, any warranty/ guarantee of goods and services sold will be the responsibility of the seller.
  • E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.
  • Further, guidelines on cash and carry wholesale trading as given in para of the FDI Policy will apply to B2B e-commerce.
Type of Entity Permitted Activities Can Keep Inventory? Permitted FDI/Route
E-commerce entity Marketplace Model (for goods and services:

B2C e-commerce)

No 100% Automatic
Manufacturer B2B and B2C e-commerce

(Selling its products manufactured in India, through wholesale and/or retail through e-commerce)

Yes 100% Automatic
Cash & Carry Wholesale Trader B2B e-commerce

(sells goods to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers)

Yes 100% Automatic
Single Brand Retail Trader B2C e-commerce (at least 30% Indian sourcing of products, and must be operating through at least one brick and mortar store) Yes 100% Automatic
Food Product Retail Trader B2C e-commerce (retail trading of food products manufactured and/or produced in India) Yes 100% Government Approval
Services (Subject to respective conditions and applicable laws) sale of services through e-commerce (Relevant Sectoral Cap) Automatic

Note: Many laws applicable in e-commerce and it is in developing stage., Pl Update here in comment section about any latest changes.

Need for E-Commerce laws