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[Analysis] Parliamentary Standing Committee Report on E-commerce
[Analysis] Parliamentary Standing Committee Report on E-commerce

July 5, 2022

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Parliamentary Standing Committee Report on E-commerce

Summary of NASSCOM’s recommendations included in the Report

 

The Department Related Parliamentary Standing Committee on Commerce recently released its report, ‘Promotion and Regulation of E-commerce in India’. We are pleased to note that many of our recommendations have been considered by the Committee in the Report, and in some instances, these are reflected verbatim as per NASSCOM’s policy submissions.

 

The key recommendations from NASSCOM that are reflected in the report are given below:

  1. Measures related to Goods and Services Tax (GST) Regime

1.1) Extend the threshold exemption provided to offline sellers in relation to GST registration to online sellers as well. The Committee has also recommended that onboarding of small sellers on online platforms be allowed based on a three-way authentication of Aadhaar, Permanent Account Number (PAN) and bank details in place of mandatory GST registration. 

The Committee’s suggestion is in line with NASSCOM’s Report providing suggestions on GST for creating a conducive environment for small online sellers. The GST Council in the 47th meeting, has also decided to waive off the requirement of mandatory registration under GST law for such small sellers, subject to certain conditions. This will enable small sellers to get a level playing field (vis-à-vis offline sellers) and transform themselves into organised players.

1.2) Allow online sellers to avail benefit under the Composition Scheme, subject to turnover threshold of Rs. 1.5 crore - The Committee’s suggestion is in line with NASSCOM’s Report providing suggestions on GST for creating a conducive environment for small online sellers. The GST Council, in the 47th meeting, has also decided to allow such sellers to avail of the benefit under Composition Scheme, subject to certain conditions. This will encourage such sellers to adopt GST compliances effectively as composition dealers are exempt from the maintenance of elaborate accounts and records.

1.3) The Committee has recommended that online sellers, who utilise warehouse of e-commerce operators to store their goods, be allowed to register such warehouses of e-commerce operators across States based on a single Principal Place of Business (PPoB) registration in the home State of the seller. The Committee’s suggestion is in line with NASSCOM’s Report providing suggestions on GST for creating a conducive environment for small online sellers.

1.4) The Committee has recommended that the feasibility and practicality of introduction of seller-wise reporting based on Aadhar/PAN by the e-commerce operator in GSTR-8 be deliberated with the relevant stakeholders. The Committee’s suggestion is in line with NASSCOM’s Report providing suggestions on GST for creating a conducive environment for small online sellers, wherein we had requested the government to waive off duplicate compliances efforts and shift the entirety of compliance responsibilities towards e commerce operators.  

 

  1. Measures to promote e-commerce

2.1) Simplify the process of registration of e-commerce companies with the Department for Promotion of Industry and Internal Trade (DPIIT) to facilitate ease of doing business. Registration with DPIIT was introduced as a proposal in the draft amendments to the Consumer Protection (e-Commerce) Rules, 2020. In our submission, we had highlighted that any new compliance requirements, such as registration with DPIIT, should be introduced with a clear and easy process which does not hamper ease of doing business. We had also suggested a simple process which can be followed for registration of e-commerce companies with DPIIT.

​​​​​​​2.2) Need for a stable FDI policy regime and strengthening of enforcement mechanism under the FDI policy. The report acknowledges the problems posed by frequent policy changes (as witnessed in the past), such as uncertainty in the policy environment thus impacting investments, business decisions and as such the overall e-commerce ecosystem. We had highlighted this to the Directorate General of Foreign Trade (DGFT) in our past engagement.

​​​​​​​2.3) Support for MSMEs related to e-commerce on-boarding, branding and digital marketing. The report acknowledges the opportunity that e-commerce can create for MSMEs. This is in line with our suggestions to DPIIT where we suggested that the government should provide support for digitisation and onboarding of MSMEs onto online platforms and incentives to offset digital marketing and branding costs to promote “Make in India”.

 

  1. Measures to Promote e-Commerce Exports

The report acknowledges the role played by e-commerce in boosting export and thus the need for making it a part of our foreign trade policy (FTP). The FTP is due for revision in September 2022. Accordingly, the report makes timely recommendations which are in line with our suggestions to the DGFT:

3.1) Include a dedicated chapter on promotion of e-commerce exports in the upcoming Foreign Trade Policy.

3.2) Set-up e-Commerce Export Zones.

3.3) Export Promotion Councils should create awareness on the opportunity and benefits of exports.

3.4) e-Commerce export promotion cells should be set up.

3.5) Establish dedicated customs clearance lanes for e-commerce exports. 

3.6) Digitise the entire customs clearance process for e-commerce exports.

3.7) Expand the presence of Foreign Post Offices (FPOs).

3.8) Review the treatment of import duty on re-imported unsold/returned items through e-commerce.

 

  1. ICT infrastructure and cyber security

    4.1) Enact the Personal Data Protection Bill, 2019 (PDPB) at the earliest.

4.2) The regulation of personal data and non-personal data should be dealt with under separate regulatory frameworks.

4.3) The e-commerce policy should ensure the protection of personal data in consonance with the upcoming PDPB (which should be the overarching personal data protection law for various sectors including e-commerce).

 

NASSCOM, in its recommendations to MeitY as well as the JPC, had emphasised that the Personal Data Protection Bill must be enacted in a timely manner. We had, in our submissions to the Joint Parliamentary Committee (JPC) and MeitY, noted that the Non-Personal Data should not form a part of this Bill. The MeitY has already established a Committee which has submitted its report on Non-Personal Data to consider in detail the framework. NASSCOM had recommended that the PDPB should be the overarching law for various sectors.

 

  1. Payment systems and financial security

5.1) Banking institutions and e-commerce platforms should create awareness among customers regarding sharing of sensitive financial data.

The report has acknowledged the need for creating awareness by banks and e-commerce platforms about customers sharing their sensitive financial data. However, it has stopped short of suggesting obligation which lenders such as banks and digital lending partners working with e-commerce platforms should adhere to in relation to consumer data. NASSCOM, in its inputs to Reserve Bank of India (RBI) on the Digital Lending Report, had recommended that there must be adequate disclosure notices to the borrowers or customers on the types of data collected, shared and retained including its type; and that there must be informed consent sought from customers before accessing their sensitive personal data.

We hope that the recommendations of the report will finally be adopted in the e-commerce policy which the DPIIT is in the process of formulating.

 

[This blog has been written jointly by members of the NASSCOM Policy Team- Tejasvi Gupta, Garima Prakash, Apurva Singh, Varun Sen and Devika Agarwal]


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