Nepal moves forward with E-Commerce Bill to regulate online trade

KATHMANDU: The Industry, Commerce, Labor, and Consumer Welfare Committee under the House of Representatives has passed the Electronic Commerce Bill, which proposes imprisonment ranging from six months to three years for e-commerce operators who fail to fulfill their obligations or commit violations, depending on the severity of the offense.

The bill, which originated in the National Assembly, was unanimously passed by the committee. The government is now preparing to present it during the winter session of Parliament, starting on February 1 (Magh 18).

The bill has addressed and improved various concerns raised by entrepreneurs, businesses, and consumers, including recognizing social media as a legitimate e-commerce platform, introducing separate provisions for small businesses, and facilitating agreements between sellers and intermediaries. However, suggestions to remove provisions for imprisonment have not been incorporated. During Sunday’s committee discussion, some lawmakers expressed that imprisoning business operators might not be appropriate.

Committee Chair Abdul Khan stated that penalties are necessary to discourage violations, emphasizing, “We have proposed penalties ranging from six months to three years. If fines alone allow violators to escape punishment, we might as well extend the maximum penalty beyond three years. The law is meant for both convenience and discipline; without deterrence, offenses won’t decrease.”

According to Section 21 of the bill, engaging in e-commerce without establishing an electronic platform, operating a business without proper listing, failing to disclose details about goods or services, or violating obligations under Sections 14, 15, or 16 will be considered offenses. Section 14 outlines the responsibilities of intermediary businesses; Section 15 pertains to businesses operating e-commerce based on listings; and Section 16 specifies the obligations of sellers.

Intermediary businesses like Amazon, Daraz, and Pathao are required to provide accurate and clear information about the goods and services listed for sale. They must not discriminate between similar goods or services offered by different sellers on their platform or favor specific sellers. Sellers are obligated to honor warranties or guarantees for the specified period and to comply with terms. Agreements with sellers must be made before listing goods or services for sale. The bill, which previously required written agreements, now proposes recognizing electronic agreements.

The definition of “electronic platform” has been revised to include platforms created for transactions of goods or services using computers, mobile devices, or similar electronic tools through websites, applications, software, internet, intranet, or social media marketplaces. Businesses conducted through social media marketplaces must also be registered with the electronic portal under the Department of Commerce, Ministry of Industry, Commerce, and Supplies.

The bill introduces provisions to support small, medium, and micro-enterprises by allowing them to use other platforms without needing to establish their own electronic platforms. An amendment to Section 4(1) ensures small businesses can operate via third-party platforms.

Section 35 provides for discounts, facilities, or concessions for small, domestic, and cottage industries selling Nepal-made goods or conducting transactions exceeding government-determined thresholds through electronic platforms. These benefits will be announced through official gazettes.

E-commerce operators and stakeholders have raised demands, including the need for e-commerce classification, inclusion of social media-based businesses, and removal of strict penalties like imprisonment for minor infractions.

The committee has redefined “business operators” to include intermediaries and listing-based e-commerce operators, and “sellers” to include intermediaries and those engaged in listing-based e-commerce. To address confusion caused by the previous bill title, which many associated with electricity, the committee decided to include the term “e-commerce” in its name. The bill will now be titled the Electronic Commerce (E-Commerce) Bill, 2080.

Industry, Commerce, and Supplies Minister Damodar Bhandari expressed satisfaction over the drafting of the new bill, calling it a significant achievement for both the committee and the government. He highlighted the importance of creating new laws based on reviews of past legislation to ensure they align with contemporary needs. The report from the Industry Committee, along with the bill, will be presented in the House of Representatives. Once passed, it will be sent back to the National Assembly with recommendations.

Fiscal Nepal |
Monday January 27, 2025, 11:16:31 AM |


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