The e-commerce industry has intrinsically become an indispensable segment of the population’s everyday life. Accessibility to any e-commerce website is not a privilege nowadays. Instead, it has become a need for everyone. E-commerce has captured that part of the life of people that the masses have become dependent on it. Various e-commerce platforms are eventually concerned with every facet of life, whether we say shopping for household items, electronic items or dealing with property brokerage.
Here, in this blog, we will walk through the extensive rules and regulations connected to the e-commerce business in India.
Foreword to E-Commerce
Today, the number of internet users has increased in volume since the internet hit India. With the everyday escalation in people’s orientation towards setting up their own businesses, the online perspective for business origination has come into effect.
E-commerce is basically regulating a business online rather than conventionally through physical means. ECommerce has become a new way of conducting business. The transition to online shopping in place of traditional procedures for shopping is taking a long stretch of time. The e-commerce business doesn’t only spell out the buying and selling of things(goods) over the internet but also innumerable processes carried out by individual organizations.
E-Commerce: A Flourishing Sector in India
For currently developing countries like India, e-commerce is an exponentially booming sector and also has made up leeway in the country. Here is the second most populated country. E-commerce is still at a growing stage, and it will take several years to take up the flight. E-commerce is the method of incorporating electronic and virtual communications in the course of business transactions.
One of the primary sites to start an e-commerce business in India was rediff.com, one of the most searched and most used sites during that time. Coping with the times, there has been a significant rise in the volume of businesses enabling online businesses and e-commerce technologies.
Amidst the lockdown due to COVID-19, the e-commerce industry saw a voluminous boost, witnessing an elevated strike in the business industry. With people physically lesser stepping into the market for shopping, offline shopping has registered a notable limp. Substantially, smaller businesses are more inclined towards adapting to e-commerce platforms.
Laws Associated with E-Commerce Business
E-Commerce business has shown a paradigm flux in this digitally advanced world. The welcome and admiration of the e-commerce business are steered by customer choice and customer satisfaction. Customer satisfaction, which is a vital component of any business, was required to be precise and impeccable. The e-commerce business has also improved convenience in commercial business transactions.
As e-commerce platforms ladle out to be the mediator between the merchants and the consumers, the business has to impose a legacy of competition laws and regulations for other businesses. Online businesses have to comply with state-specific laws and onerous obligations for their smooth run.
The regulatory laws associated with e-commerce businesses are:
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Foreign Direct Investment Policy
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Foreign Exchange Management Act, 1999
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Companies Act, 2013
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Payment and Settlements Act, 2007 and other regulations imposed by RBI concerning online payments.
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Packaging and Labelling
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Legal Metrology Act, 2009, compiled with Legal Metrology Rules, 2011
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Sales, Shipping, Refunds and Returns
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Rules and Regulations implemented by the respective state or ministry
The Technology and Data Protection Laws associated with e-commerce business are:
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Information Technology Act, 2000, compiled with Information Technology Rules, 2011
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Consumer Protection Act, 1986
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General Data Protection Regulations
The Legal Laws and Tax analogous to e-commerce business are:
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Indian Contract Act,1872
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Indian Copyright Act, 1957
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The Patents Act, 1970
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Intellectual Property Issues
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Labour Laws
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Income Tax, 1961
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Goods and Services Tax
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Double Taxation Avoidance Agreement
Prologue to E Commerce Models
The traditional models of business in which the e-commerce industry is segregated are as follows:
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Business to Consumer (B2C) Model
In the business-to-consumer Model, the merchant sells the products ordered by the consumers directly to the consumers. The customer will select the products according to his preferences and will place the order on the business’s e-commerce website without the hurdle of being present physically at the marketplace. The underlying process includes the rendering of the notification regarding the product order to the customer, then validating the credentials via email and further delivery of the required product.
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Business to Business (B2B) Model
In the Business-to-Business Model, the merchant sells its products through an intermediary person or company to the final and actual customer. In other words, the Business to Business model sells its goods and services to another business. The seller may get orders through the business’s website but deliver the products through its online store.
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Consumer to Business (C2B) Model
The obverse of the traditional commercial business-to-consumer model is the consumer-to-business model. This model provides the facility for an individual to sell his own products and services to the companies. This comprehensive model is nowadays used by big companies to connect and refer to social media influencers for the purpose of marketing their products and selling them.
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Consumer-to-Consumer (C2C) Model
The Consumer to Consumer business model is a model which connects consumers to the consumers by selling their goods and services and charging transaction and delivery fees. A challenge imposed by this model is regarding quality benchmarks and technology maintenance and preservation.
E-Commerce Industry in the Time to Come
The changing graph of the e-commerce industry can be significantly alarming and invigorating at the same time. Every hour of the day, there are changes that may succumb to the business’s growth, and some are difficult to keep up with. The e-commerce industry is developing in India at a rapid momentum, and the e-commerce industry plays a remarkable role in it.
In future, the e-commerce industry will tend to encompass the trends in regard to mobile optimization, wearable devices, ads personalization, marketing automation, local marketing and branding. Currently, the Indian Government is also switching its focus to the e-commerce industry and contributing to its elevation. The development of the e-commerce industry in India has created its importance in financing, training and growing technology.
All things considered, the growing e-commerce industry in India will prove to be a boon for the entire marketing industry.
