E-Commerce Disputes In India Would Now Be Resolved Using Online Dispute Resolution (ODR) Mechanisms

Effective and timely dispute resolution is sine quo non for ease of doing business in any country. India has been facing the problem of mammoth backlog of legal cases that has overburdened the Indian judiciary to the extent of almost collapse. This scenario is going to worsen in near future as Indian government has been encouraging projects like digital India, make in India, startups India, etc. As these fields are new, they would give rise to litigation on the one hand and lack of knowledge about these techno legal issues on the part of lawyers and judges on the other hand.

Perry4Law Organisation (P4LO) has come out with some techno legal solutions to resolve these issues. It has launched unique techno legal projects on e-courts and online dispute resolution (ODR) in India. These projects can be utilised by Indian government, public sector undertakings (PSU), Indian companies, multi national companies (MNCs), national and international organisations, individuals, etc. One such segment that can use these techno legal service is the e-commerce industry of India. A prototype of a platform to resolve e-commerce disputes in India can be accessed here. We are working on a model that would utilise the existing and future techno legal experience of P4LO regarding resolving e-commerce disputes through ODR.

E-commerce has introduced significant choices for Indian consumers and customers. However, e-commerce in India has also given rise to many disputes by the consumers purchasing the products from e-commerce websites.

There is no formal e-commerce dispute resolution regulatory mechanism in India as we have no dedicated e-commerce laws in India. In fact, many e-commerce websites are not following Indian laws at all and they are also not very fair while dealing with their consumers. Allegations of predatory pricing, tax avoidance, anti competitive practices, etc have been leveled against big e-commerce players of India.

As a result, disputes are common in India that are not satisfactorily redressed. This reduces the confidence in the e-commerce segment and the unsatisfied consumers have little choice against the big e-commerce players. At a time when we are moving toward global norms for e-commerce business activities, the present e-commerce environment of India needs fine tuning and regulatory scrutiny. In fact, India is exploring the possibility of regulation of e-commerce through either Telecom Regulatory Authority of India (TRAI) or through different Ministries/Departments of Central Government in a collective manner.

It is obvious that e-commerce related issues are not easy to manage. E-commerce disputes resolution is even more difficult and challenging especially when Indian Courts are already overburdened with court cases. Of course, establishment of e-courts in India and use of online dispute resolution (ODR) in India are very viable and convincing options before the Indian Government.

To make ODR a success in India, Techno Legal Centre of Excellence for Online Dispute Resolution (ODR) in India (TLCEODRI) has been providing its techno legal ODR services to national and international stakeholders. TLCEODRI has now decided to manage e-commerce disputes resolution in India through its techno legal ODR platform. To implement this initiative in a smooth manner, an ODR Discussion Forum has been started by TLCEODRI.

We have also started a dedicated Board/Thread at the ODR Discussion Forum for E-Commerce Dispute resolution In India through ODR (registration required). This is a good opportunity for e-commerce websites of India and abroad to get good techno legal insight about Indian laws and their implementation to e-commerce field.

The access and registration to this Board is allowed to e-commerce websites alone that have already been established and are operating in India. Our existing e-commerce clients and other clients can contact us for immediate activation of their accounts while the registration request of other e-commerce websites would be duly approved/disapproved by our moderators/administrators. If an e-commerce websites is engaging us for our techno legal services, it would be granted immediate access to this segment at its request.

Very soon we would introduce additional features for e-commerce companies and online consumers. This would also include online filing of complaints and grievance by the consumers and other aggrieved individuals/companies against the e-commerce companies of India and abroad. Such complaints and grievances would be openly available for public access to general public, regulatory authorities and other e-commerce stakeholders.

We would also introduce a system where grievance can be managed by the e-commerce companies/websites and their consumers through multiple dispute resolution processes and stages of TLCEODRI. This would include conciliation, mediation and arbitration through ODR mechanisms. Please check our ODR Discussion Forum for regular updates about the ODR services of TLCEODRI.

Software For Calculating E-Commerce Exports Developed By Indian Government

Indian government has been streamlining e-commerce and activities related to the same for the past one year. Initially an e-commerce friendly foreign direct investment policy was formulated by Indian government. The same may be accessed at Consolidated FDI Policy Circular Of 2015 By DIPP (pdf). Then guidelines were issued to further clarify the e-commerce related business activities in India. The same can be accessed at Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf).

Now Indian government is testing a software that intends to capture crucial data related to export of e-commerce related goods and services in India. Indian government has already indicated that it would impose tax on online transactions happening in India for certain cases. For instance, according to the Budget announcement, any person or entity that makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company will now need to withhold 6% tax on the gross amount being paid as an equalisation levy.

The said rule is applicable when the payment is made to companies that don't have a permanent establishment in India. This tax, however, is only applicable when the payment has been made to avail certain B2B services from these technology companies. Specified services include online and digital advertising or any other services for using the digital advertising space. This list, however, may be expanded soon.

Indian government now plans to tap data on overseas online sales as part of efforts to boost outbound shipments through e-commerce platforms and channel benefits to these dedicated exporters. Indian government has made a software for e-commerce exports that would capture data for further action and policy decisions. This would benefit small exporters as customised solutions can be then provided to them by Indian government. Presently the value of items shipped through couriers is often not captured in export data because they are categorised as samples or gifts. These are labeleled as samples because under the normal export channel exporters have to file shipping bills and are subject to checks by custom officials, which is cumbersome, especially for small exporters with low-value shipments. The software intends to mitigate these rigours and further help in claiming duty drawbacks for e-commerce exports. To give benefits to small exporters, the director general of Foreign Trade has defined "e-commerce" as the buying and selling of goods and services, including digital products, conducted over digital and electronic networks.

These steps are being introduced a year after the government provided export incentives to the shipment of goods through couriers or foreign post offices using e-commerce in the Foreign Trade Policy of 2015-2020. At present, exports that can avail of these sops are capped at Rs 25,000 per consignment, a value considered small for such purchases. Moreover, only six product categories i.e. handicrafts, handlooms, toys, customised fashion garments, books and leather footwear are entitled to these incentives under the Merchandise Exports from India Scheme (MEIS).

Source: E-Retailing Laws.

Foreign Direct Investment (FDI) In E-Retailing Sector Of India 2016 Series

India is presently witnessing an e-retailing era. This is a golden time for e-retailing entrepreneurs who have multiple domains to explore. This is also a challenging period for the Indian government that is clearly struggling to deal with technology related issues. Some of these issues include taxation of online transactions by companies like Google, foreign direct investment (FDI) regulations for e-retailing companies, techno legal framework for online businesses, cyber security issues of e-retailing businesses in India, e-commerce dispute resolutions, etc.

As per the existing FDI policy, contained in the "Consolidated FDI Policy Circular 2015" (pdf) (FDI Policy) as amended from time to time, FDI up to 100% under automatic route is permitted in Business to Business (B2B) e-commerce. No FDI is permitted in Business to Consumer (B2C) e-commerce. However, FDI in B2C e-commerce is permitted if certain conditions are fulfilled.

However, companies are violating these norms by accepting FDI by citing different purposes for the use of such FDI money. Both the Reserve Bank of India (RBI) and Enforcement Directorate (ED) are aware of these issues but none of them has taken any action against the guilty individuals and companies. RBI is also maintaining a vigil over e-commerce gateway operators, many of whom store financial information about Indians on overseas servers, but is not imposing new stringent regulations on new form of transactions.

In other such developments, the Maharashtra’s FDA ordered filing of FIR against Snapdeal, its CEO Kunal Bahl, Directors and distributors for online sale of prescription drugs. There are many techno legal requirements to open online pharmacy stores in India that almost all e-retailing fail to adhere to. To deal with this nuisance, a dedicated online pharmacy law is needed for India. For some time it was believed that the Telecom Regulatory Authority of India (TRAI) may be given the task to regulate e-commerce in India. However, TRAI refused to take the additional responsibility in this regard.

As far as FDI is concerned, the documents titled Consolidated FDI Policy Circular Of 2015 By DIPP (pdf) and Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf) would be helpful for detailed insight. However, Indian government must be ready for new challenges from global players. For instance, recently US sought trade rules for e-commerce and cloud computing under the WTO banner. Similarly, deep discounting and predatory pricing issues are also required to be resolved by Indian government. Taxation issues are already vexing Indian government for long. We hope that these issue would be resolved by Indian government very soon.