New e-commerce law in Nepal: Here are 9 key provisions

With globalisation, the world has seen rapid development in e-commerce. Nepal cannot stay isolated from this phenomenon. Consequently, the Nepali market has been witnessing an upswing in e-commerce businesses.

Meanwhile, information technology is booming majorly because of internet penetration in the Nepali market which has reached 77.91 per cent of the total population as of mid-October 2020.

The upswing was further expanded by the spread of the coronavirus which forced people to lock themselves inside the house. In this commercial world, e-commerce is the future market. But, it is full of regulatory complexities regarding the issues such as data privacy, delivery time, consumer protection, mode of digital payment among a few.

The e-commerce market is just unfolding in Nepal. However, it does not have any clear legal provisions and guidelines which has caused inconvenience to the entrepreneurs in starting and operating the business. On the other hand, consumers are not in a position to trust e-commerce businesses as there are no such laws and state agencies that are fully designated for regulating e-commerce.

Recently, the Ministry of Industry, Commerce and Supplies drafted an e-commerce bill with an aim to create, regulate and facilitate online trade in Nepal. The bill is being reviewed by the concerned ministry which shall be passed from parliament and shall be implemented upon approval from the president. It will be the first dedicated e-commerce law in Nepal.

The bill aims at addressing most of the problems the costumers were facing in the sector currently. In a nutshell, here are nine key provisions proposed in the bill:

1. Order to be deemed as contract

Section 7, sub-section 1: If the seller accepts the order placed by the customer, it shall be deemed as contract and the duties as of contract shall be created.

2. Right to cancellation

Section 7, sub-section 3: The customer can cancel the order until the product is dispatched or the service is provided.

3. No charge in case of cancellation

Section 7, sub-section 4: An order cancelled as per section 7, sub-section 3 shall not be charged and if the amount for the product or service is pre-paid, all the amount shall be refunded to the customer.

4. Diverse payment methods

Section 8, sub-section 2: The customer can pay by using any mode of payment; it may be cash, debit/credit card, internet/mobile banking or through cheque.

5. Fixed place and time for delivery

Section 9: The seller shall deliver the goods in a particular place and time which is mentioned while placing an order.

6. Prohibition on alteration

Section 11(a): The goods and services mentioned on the website shall be delivered to the customers.

7. Provision of replacement and refund

Section 11(b): If the goods delivered is found to be defective, the seller shall replace the goods or shall refund the amount.

8. Non-compliant sellers to be booked

Section 18, sub-section 2: If the seller commits any thing against the act, they shall be labile for fine ranging up to Rs 200,000.

 9. Complaint response mechanism

Section 20: In case of inability to deliver the goods within the stated time,the customer can file the complaint in concerned District Administration Office.

Section 23: The seller should designate an employee to hear complaints from the customers. The name, phone number and address of the employee shall be placed on the website

Existing provision

For now, due to the lack of designated laws to regulate and incorporate the e-commerce business, the companies are incorporated as per the Company Act 2063 after registration at the Office of the Company Register.

After incorporating the company as per the Company Act, it should take approval from the Department of Commerce or the Department of Industry depending upon the nature of business. For instance, if the nature of business is related to the trading of goods, it shall take approval from the Department of Commerce and if the business house is incorporated with an objective of producing goods and materials, the Department of Industry should give the approval.

Here again, there is no clear procedure and criteria for applying and issuance of licences.

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Regmi is an advocate associated with Associates Hub Law Firm.

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