E-commerce, or buying and selling goods and services online, has grown quickly in Nepal. However, no single law still fully covers the entire e-commerce space. Instead, different existing laws apply to various parts of the online shopping process. This article looks at where Nepal stands with e-commerce regulations
Current State of E-Commerce laws in Nepal
Nepal doesn’t have a dedicated e-commerce law yet. Instead, there are several existing laws that impact online businesses:
- Companies Act 2063: This law covers how e-commerce companies must be registered and operate in Nepal.
- Consumer Protection Act 2075: This protects consumers from unfair trade practices, including in e-commerce.
- Value Added Tax Act 2052: This ensures e-commerce businesses collect VAT on products they sell.
These laws are helpful, but they don’t fully address the unique issues that come with online businesses.
The 2023 E-Commerce Bill: What was Proposed?
In 2080 B.S. (2023), a new E-Commerce Bill was proposed to create clear rules specifically for the e-commerce industry. While it’s not passed yet, the bill aims to cover several key areas:
Key Points of the Proposed Bill
- Order Acceptance = Contract: When an online seller accepts an order, it becomes a legal contract. If things go wrong, the customer has legal backing.
- Product Cancellations: Customers can cancel an order before it’s shipped without being charged cancellation fees.
- Complaints Process: If a product isn’t delivered on time, customers can file complaints with the District Administration Office. E-commerce businesses must provide a contact person to handle these complaints, and their details must be easy to find on the website.
- Who Can Sell Online: Only businesses that are legally registered and licensed to sell goods or services can operate e-commerce platforms. The law also bans online sales of illegal / Grey items
What Information E-Commerce Businesses Must Provide
The bill requires e-commerce businesses to be transparent with customers. Platforms must display:
- Business info: The company’s name, physical address, and registration number.
- Tax info: VAT or PAN number, showing they’re compliant with tax laws.
- Contact info: Details of the customer service team, including a person responsible for complaints.
This makes it easier for consumers to trust online businesses and know where to go if things go wrong.
What’s the Current Situation?
While the E-Commerce Bill is still under review, existing laws already touch on e-commerce. Here’s how they work:
- Consumer Protection: The Consumer Protection Act ensures consumers can file complaints about products or services they buy online. However, it doesn’t fully cover the specifics of e-commerce.
- Taxation: E-commerce businesses must collect VAT on taxable products, according to the VAT Act. But, without a clear e-commerce law, it’s up to the businesses to figure out how to comply with these rules.
- Business Registration: Under the Companies Act, businesses must register and operate legally. This applies to e-commerce companies as well.
While these rules are a good starting point, they don’t fully address the unique needs of the online marketplace.
Challenges with Current Laws
Here are some of the problems with the current setup:
- Lack of Clear Rules: Since there’s no comprehensive e-commerce law, businesses are left to interpret existing laws, which can be confusing, especially for new companies.
- Consumer Protection Gaps: Issues like faulty products, delayed deliveries, and poor customer service are still a concern. Existing laws don’t address these issues directly enough.
- Informal Businesses: Many e-commerce businesses operate informally, especially on social media. This makes it hard for consumers to know if they’re dealing with legitimate businesses, and there’s little legal protection if something goes wrong.
- Worker Rights: Gig workers often work for e-commerce platforms without clear protections or rights, which is another gap in the current legal framework.
So What the Future Holds?
The E-Commerce Bill aims to address many of these issues by offering a clearer legal framework for online businesses. If passed, it could improve:
- Consumer Confidence: Clear rules around cancellations, refunds, and complaints will make consumers feel more secure shopping online.
- Business Transparency: E-commerce platforms will have to disclose key business details, making it easier for customers to know they’re dealing with a legitimate business.
- Clearer Regulations for New Businesses: The bill will make it easier for new e-commerce businesses to operate legally and avoid confusion.
- Protection for Workers: If the bill includes rules for gig workers, it could improve their rights and working conditions.
E-commerce laws in Nepal: Conclusion
E-commerce in Nepal is growing fast, but the laws that govern it are still not developed at all. The E-Commerce Bill proposed in 2080 B.S. (2023) could be a big step forward in creating a clear and fair framework for online businesses. Stay tuned, as we will bring more information upon further development of E-commerce rules, laws and regulation in Nepal.
