All Days Except National Holidays(08:00 AM To 08:00 PM)
"e-commerce"
means buying or selling of goods or services including digital products over
digital or electronic network;
An e-commerce
entity” means any person who owns, operates or manages digital or electronic
facility or platform for electronic commerce, but does not include a seller
offering his goods or services for sale on a marketplace e-commerce entity;
An "electronic service provider" means
a person who provides technologies or processes to enable a product seller to
engage in advertising or selling goods or services to a consumer and includes
any online market place or online auction sites;
In India, there are three types of e-commerce business model:
Inventory base model of e-commerce
· Marketplace base model of e-commerce
· The hybrid model of inventory based and marketplace
model.
Marketplace and Inventory-Based Model
· Marketplace based model of e-commerce means
providing an information technology platform by an e-commerce entity on a
digital & electronic network to act as a facilitator between the buyer and
seller.
· In a marketplace model, the e-commerce firm is not
allowed to directly or indirectly influence the sale price of goods or services
and is required to offer a level playing field to all vendors.
· Inventory based model of e-commerce means an
e-commerce activity where the inventory of goods and services is owned by
e-commerce entity and is sold to the consumers directly.
The Act
prescribes Rules for preventing fraud and unfair trade practices in e-commerce
sector. Covers E-Commerce Transactions: The New Act has widened the definition
of 'consumer'. The definition now includes any person who buys any goods,
whether through offline or online transactions, electronic means, teleshopping,
direct selling or multi-level marketing. The earlier Act did not specifically
include e-commerce transactions, and this lacuna has been addressed by the New
Act.
Under the E-Commerce Rules an "e-commerce
entity" is defined broadly to mean any person who owns, operates, or
manages digital or electronic facility or platform for e-commerce.
These
rules shall apply to:
(a)
All goods and services bought or sold over digital or electronic network
including digital products;
(b)
All models of e-commerce, including marketplace and inventory models of
e-commerce;
(c)
All e-commerce retail, including multi-channel single brand retailers and
single brand retailers in single or multiple formats; and
(d)
All forms of unfair trade practices across all models of e-commerce: Provided
that these rules shall not apply to any activity of a natural person carried
out in a personal capacity not being part of any professional or commercial
activity undertaken on a regular or systematic basis.
(e)
e-commerce entity which is not established in India, but systematically offers
goods or services to consumers in India.
(f)
Apply to all e-commerce transactions involving goods or services
In Inventory model the entity owns the goods
while in Market place model they don’t own the goods sold or displayed by
sellers. In inventory models FDI is not permitted.
The Intermediary due diligence Rules under IT
Act do not cover or regulate Unfair trade practices and protect consumer
rights. In the new Consumer Protection Act a
Central Consumer Protection Authority has been established to regulate Unfair
Trade practices in online and offline business.
These Rules have been finalised after taking
inputs from the Department for Promotion of Industry and Internal Trade, under
the aegis of the commerce ministry,
so that they gel with the overall National e-commerce policy. The National E-Commerce Policy being
drafted by DIPIT lays down strategies to address issues pertinent to the
sector. Consumer protection, data privacy and maintenance of a level-playing
field are some of the crucial issues that will find place therein.
The 2019 Act includes the
definition of “food” as defined under the Food and Standards Act, 2006. This
has replaced the definition of “goods” under the 1986 Act. This would help in
bringing the number of food delivery platforms to come under the ambit of
consumer protection.
It is preferable that all e-commerce companies
should have refund or return policy but there is no such law which enforces it.
However, if there is any deficiency, the consumer is protected under Consumer
Protection Act and can seek redressal for the same.
Whenever you
shop online, read the fine print carefully. Make sure you are aware of shipping
charges, delivery time, and cancellation and return policies, as well as the
warranty clauses. Keep your financial information and passwords safe and always
make payment through secured gateways like ?https and lock image? in its url.
If you are shopping on the website for the first, opt for cash on delivery
payment option. Always check if the website has a landline phone and postal
address.
Convenience,
Better choice of similar products, Discounted or competitive prices, Door
delivery, Return policy, Refund policy, Comparison of Prices, Crowd Free
Shopping.
·
e
registered under Indian laws and must certify compliance with the proposed
Rules;
· Not
be promoted or managed by (which includes all key members of the management
team) anyone convicted of a criminal offense carrying a punishment of 5 years
by any Court of competent jurisdiction. This applies globally and is not
restricted to India
· Comply
with the provisions of IT (Intermediaries Guidelines) Rules, 2011
· Must
confirm to Reserve Bank of India (RBI) guidelines for payment facilities.
1. An
ecommerce entity shall
a)
Be
a company incorporated under the
Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013) or a
foreign company covered under clause (42) of section 2 of the Companies Act,
2013 (18 of 2013) or an office, branch or agency outside India owned or
controlled by a person resident in India as provided in sub-clause (iii) of
clause (v) of section 2 of the Foreign Exchange Management Act,1999 (42 of
1999); and
b)
Appoint
a nodal person of contact or an alternate senior designated functionary who is
resident in India, to ensure compliance with the provisions of the Act or the
rules made thereunder.
c)
Provide
the following information in a clear and accessible manner on its platform,
displayed prominently to its users, namely:--
ü legal name of
the e-commerce entity;
ü principal
geographic address of its headquarters and all branches;
ü name and
details of its website; and
ü contact
details like e-mail address, fax, landline and mobile numbers of customer care
as well as of grievance officer.
2. Every
e-commerce entity shall establish an adequate grievance redressal mechanism
having regard to the number of grievances ordinarily received by such entity
from India, and shall appoint a grievance officer for consumer grievance
redressal, and shall display the name, contact details, and designation of such
officer on its platform.
Every
e-commerce entity shall ensure that the grievance officer referred to in
sub-rule (4) acknowledges the receipt of any consumer complaint within
forty-eight hours and redresses the complaint within onement from the date of
receipt of the complaint.
Where an e-commerce entity offers imported
goods or services for sale, it shall mention the name and details of any
importer from whom it has purchased such goods or services, or who may be a
seller units platform.
Every e-commerce entity shall endeavor on a
best effort basis to become a partner in the convergence process of the National
Consumer Helpline of the Central Government.
3.No e-commerce entity shall,
ü Shall adopt
any unfair trade practice, whether in the course of business on its platform or
otherwise.
ü Impose
cancellation charges on consumers cancelling after confirming purchase unless
similar charges are also borne by the e- commerce entity, if they cancel the purchase
order unilaterally for any reason.
ü Record the
consent of a consumer for the purchase of any good or service offered on its
platform where such consent is expressed through an explicit and affirmative
action, and no such entity shall record such consent automatically, including
in the form of pre-ticked checkboxes.
ü manipulate
the price of the goods or services offered on its platform in such a manner as
to gain unreasonable profit by imposing on consumers any unjustified price
having regard to the prevailing market conditions, the essential nature of the
good or service, any extraordinary circumstances under which the good or
service is offered, and any other relevant consideration in determining whether
the price charged is justified;
ü Discriminate
between consumers of the same class or make any arbitrary classification of
consumers affecting their rights under the Act.
(1) A marketplace e-commerce entity which
seeks to avail the exemption from liability under sub-section (1) of section 79
of the Information Technology Act, 2000 (21 of 2000)shall comply with
sub-sections (2) and (3) of that section, including the provisions of the
Information Technology(Intermediary Guidelines) Rules, 2011.
(2) Every marketplace e-commerce entity shall
require sellers through an undertaking to ensure that descriptions, images, and
other content pertaining to goods or services on their platform is accurate and
corresponds directly with the appearance, nature, quality, purpose and other
general features of such good or service.
(3) Every marketplace e-commerce entity shall
provide the following information in a clear and accessible manner, displayed
prominently to its users at the appropriate place on its platform:
(a) details about the sellers offering goods
and services, including the name of their business, whether registered or not,
their geographic address, customer care number, any rating or other aggregated
feedback about such seller, and any other information necessary for enabling
consumers to make informed decisions at the pre-purchase stage:
Provided that a marketplace e-commerce entity
shall, on a request in writing made by a consumer after the purchase of any
goods or services on its platform by such consumer, provide him with
information regarding the seller from which such consumer has made such
purchase, including the principal geographic address of its headquarters and
all branches, name and details of its website, its email address and any other
information necessary for communication with the seller for effective dispute
resolution;
(b) a ticket number for each complaint lodged
through which the consumer can track the status of the complaint;
(c) information relating to return, refund,
exchange, warranty and guarantee, delivery and shipment, modes of payment, and
grievance redressal mechanism, and any other similar information which may be
required by consumers to make informed decisions;
(d) information on available payment methods,
the security of those payment methods, any fees or charges payable by users,
the procedure to cancel regular payments under those methods, charge-back
options, if any, and the contact information of the relevant payment service
provider;
(e)
all information provided to it by sellers under sub-rule (5) of rule 6; and
(f) an explanation of the main
parameters which, individually or collectively, are most significant in
determining the ranking of goods or sellers on its platform and the relative
importance of those main parameters through an easily and publicly available
description drafted in plain and intelligible language.
(g) Every marketplace e-commerce entity shall
include in its terms and conditions generally governing its relationship with
sellers on its platform, a description of any differentiated treatment which it
gives or might give between goods or services or sellers of the same category.
(h) Every marketplace e-commerce entity shall
take reasonable efforts to maintain a record of relevant information allowing
for the identification of all sellers who have repeatedly offered goods or
services that have previously been removed or access to which has previously
been disabled under the Copyright Act, 1957 (14 of 1957), the Trade Marks Act,
1999 (47 of 1999) or the Information Technology Act, 2000 (21 of 2000):
(1) No seller offering goods or services
through a marketplace e-commerce entity shall
·
adopt
any unfair trade practice whether in the course of the offer on the e-commerce
entity’s platform or otherwise
·
falsely
represent itself as a consumer and post reviews about goods or services or
misrepresent the quality or the features of any goods or services.
·
refuse
to take back goods, or withdraw or discontinue services purchased or agreed to
be purchased, or refuse to refund consideration, if paid, if such goods or
services are defective, deficient or spurious, or if the goods or services are
not of the characteristics or features as advertised or as agreed to, or if
such goods or services are delivered late from the stated delivery schedule:
(2) Any
seller offering goods or services through a marketplace e-commerce entity shall:
(a) have a prior written contract with the
respective e-commerce entity in order to undertake or solicit such sale or
offer;
(b) appoint a grievance officer for consumer
grievance redressal and ensure that the grievance officer acknowledges the
receipt of any consumer complaint within forty-eight hours and redresses the
complaint within one month from the date of receipt of the complaint;
(c) Ensure that the advertisements for
marketing of goods or services are consistent with the actual characteristics,
access and usage conditions of such goods or services.
(d) Provide to the e-commerce entity its legal
name, principal geographic address of its headquarters and all branches, the
name and details of its website, its e-mail address, customer care contact
details such as fax, landline, and mobile numbers and where applicable, its
GSTIN and PAN details.
(3) Any seller offering goods or services
through a marketplace e-commerce entity shall provide the following information
to the e-commerce entity to be displayed on its platform or website:
(a) All contractual information required to be
disclosed by law;
(b) total price in single figure of any good
or service, along with the breakup price for the good or service, showing all
the compulsory and voluntary charges such as delivery charges, postage and
handling charges, conveyance charges and the applicable tax, as applicable;
(c) All mandatory notices and information
provided by applicable laws, and the expiry date of the good being offered for
sale, where applicable;
(d) All relevant details about the goods and
services offered for sale by the seller including country of origin which are
necessary for enabling the consumer to make an informed decision at the
prepurchase stage;
(e) The name and contact numbers, and designation
of the grievance officer for consumer grievanceredressal or for reporting any
other matter;
(f) Name and details of importer, and
guarantees related to the authenticity or genuineness of the imported products;
(g) Accurate information related to terms of
exchange, returns, and refund including information related to costs of return
shipping in a clear and accessible manner;
(h) Relevant details related to delivery and
shipment of such goods or services; and
(i) Any relevant guarantees or warranties
applicable to such goods or services.
Provide information in a clear and accessible
manner, on:
a. Information
related to return, refund, exchange, warranty and guarantee, delivery and shipment,
cost of return shipping, mode of payments, grievance redressal mechanism,
b. all
mandatory notices and information required by applicable laws;
c. information
on available payment methods, the security of those payment methods, the procedure
to cancel regular payments under those methods, any fees or charges payable by
users, chargeback options,
d. all
contractual information required to be disclosed by law;
e. total
price in single figure of any good or service along with the breakup price for
the good or service, showing all the compulsory and voluntary charges, such as
delivery charges, postage and handling charges, conveyance charges and the
applicable tax; and
f. a
ticket number for each complaint lodged, through which the consumer can track
the status of their complaint.
g. No
posting of false reviews about goods and services or misrepresent the quality
or the features of any goods or services.
h. Every
inventory e-commerce entity shall ensure that the advertisements for marketing
of goods or services are consistent with the actual characteristics, access and
usage conditions of such goods or services;
i. No
inventory e-commerce entity shall refuse to take back goods, or withdraw or
discontinue services purchased or agreed to be purchased, or refuse to refund
consideration, if paid, if such goods or services are defective, deficient
spurious, or if the goods or services are not of the characteristics or
features as advertised or as agreed to, or if such goods or services are
delivered late from the stated delivery schedule:
b) (j) Any inventory e-commerce entity which explicitly or implicitly vouches for
the authenticity of the goods or services sold by it, or guarantees that such
goods or services are authentic, shall bear appropriate liability in any action
related to the authenticity of such good or service.
The provisions of the Consumer Protection Act,
2019 (35 of 2019) shall apply for any violation of the provisions of these
rules.
The
Foreign Exchange Management Rules, 2019 currently recognise the marketplace and
inventory model.
· It permits 100% FDI under the automatic route to
marketplace entities as also to those engaged in single-brand retail.
· Foreign investments, up to 51%, are permitted
in multi-brand retail with prior government approval.
· As per the non-debt rules, entities engaged
in single-brand retail are permitted to undertake retail
trading through e-commerce.
· However, single-brand retail trading through
e-commerce has to open a brick-and-mortar store within two years from the date
it commences online retail.
· Retail trading, in any form, by means of
e-commerce, is not permissible for entities engaged in inventory-based
multi-brand retail trading and having foreign investment.
· The
e-commerce market is expected to reach US$ 64 billion by 2020 and US$ 200
billion by 2026. Thus there is a need for clearly laid-down rules for
electronic commerce in the country.
· E-
commerce is currently regulated by multiplicity of government departments such
as IT Department, industrial policy, revenue, and RBI. Hence, a national
e-commerce policy would consolidate the various norms and regulations to cover
all online retailers.
· With
the increasing online frauds, there is a need to strengthen the regulatory
regime for protecting the consumer in the context of e-commerce
·
New
e-commerce rules restrict players from selling the products of companies in
which they have a stake and capping the percentage of inventory that a vendor
can sell through a marketplace entity (IT platform of an e-commerce entity) or
its group companies.
·
Also,
it curbs the practice of deep discounts, the government said they cannot
directly or indirectly influence the price of goods and services, and also
brought in a new set of rules that bar the sale of products exclusively in one
marketplace.
·
The
first restriction explicitly disallows e-commerce marketplace companies from
selling private labels that are brands they directly or indirectly own, on
their platforms.
·
E-commerce
companies would be barred from selling products sourced from firms in which
they have a stake in or control over.
·
From
the point of view of the vendor too, the clarification said that an entity with
an equity stake owned by an e-commerce marketplace entity or its group
companies, or having control on its inventory by e-commerce marketplace entity
or its group companies, will not be permitted to sell its products on the
platform run by such marketplace entity.
·
E-commerce
entities will have to maintain a level playing field, and ensure that they do
not directly or indirectly influence the sale price of goods and services. The
policy mandates that no seller can sell its products exclusively on any
marketplace platform
· In
February 2019, a draft National e-Commerce policy has been prepared and placed
in the public domain, which addresses six broad issues of the e-commerce
ecosystem viz. e-commerce marketplaces; regulatory issues; infrastructure
development; data; stimulating domestic digital economy and export promotion
through e-commerce.
·
The
Department of Commerce initiated an exercise and established a Think Tank on
‘Framework for National Policy on e-Commerce’ and a Task Force under it to
deliberate on the challenges confronting India in the arena of the digital
economy and electronic commerce (e-commerce).
·
The
Reserve Bank of India (RBI) has decided to allow "interoperability"
among Prepaid Payment Instruments (PPIs) such as digital wallets, prepaid cash
coupons and prepaid telephone top-up cards. RBI has also instructed banks and
companies to make all know-your-customer (KYC)-compliant prepaid payment
instruments (PPIs), like mobile wallets, interoperable amongst themselves via
Unified Payments Interface (UPI).
In India 100% FDI is permitted in B2B e-commerce,
however, No FDI is permitted in B2C e-commerce.
· 100% FDI under automatic route is permitted in the
marketplace model of e-commerce, while FDI is not permitted in inventory based
model of e-commerce.
· India allows 100 percent foreign direct investment (FDI) in the marketplace model of e-commerce, which it defines as a tech platform that connects buyers and sellers.
· India
has not allowed FDI in inventory-driven models of e-commerce. The inventory
model, which Walmart and Amazon use in the United States, is where the goods
and services are owned by an e-commerce firm that sells directly to retail
customers.
· The
restriction is aimed largely at protecting India’s vast unorganized retail
sector that does not have the clout to purchase at scale and offer big
discounts.
· In order to increase the participation of foreign players in the e-commerce field, the Government has increased the limit of foreign direct investment (FDI) in the e-commerce marketplace model for up to 100% (in B2B models).
Anyvendor who purchases 25% or more of its inventory from an e-commerce group company will be considered to be controlled by that e-commerce company, and thereby barred from selling on its portal.
The policy mandates that no seller can sell its products exclusively on any marketplace platform and that all vendors on the e-commerce platform should be provided services in a “fair and non-discriminatory manner”. Services include fulfilment, logistics, warehousing, advertisement, payments, and financing among others.