The need for a regulator for e commerce

1. The Need for a Regulator for E-
Commerce: Special Reference to
Taxation
Nirmal Mathew
Intern
PLR Chambers

3. Introduction:
• According to estimates by Internet giant Google, the
value of India's swelling e-commerce business is
estimated to propel from $20 billion in 2015 to
$70billion by 2020.
• E- Commerce activities are extremely complex and
diverse and the present laws in place are inadequate to
govern it.
• Monitoring is also a difficult task and this activity
cannot be kept under the jurisdiction of a single
department or ministry and therefore there needs to
be a proper regulatory framework developed with
close coordination between different ministries.

4. Regulatory Framework
• Consumer affairs department’s proposal
• Committee of Secretaries Meeting.
• To bring it under the Telecom Regulatory
Authority of India (TRAI)
• Written Reply from MoS (Finance)

5. Key Issues in developing a Regulatory
Framework
• Telecom reform
• Recognition of electronic documents
• Consumer protection
• Electronic Funds Transfer (EFT)
• Dispute resolution
• ISP liability
• Domain names
• Taxation

6. Current Issues where there is lack of
clarity
• Electronic payment and how electronic transactions are
going to be made.
• Intellectual Property Rights
• Negotiable instruments such as cheque, banker’s orders,
pay orders etc.
• Right and liabilities of the domain name holders- the most
basic starting point for anyone interested in e-commerce
business.
• WAP (Wireless Application Protocol)
• Mobile Commerce.
• Protection of e-consumers and
• E-taxation

7. Taxation Issues
• Some of the fundamental tax-related issues raised by the
evolution of cross-border e-commerce transactions may be
summarised as follows:
1. Is there a need to develop new norms and tenets of
interpretation to determine the nature and character of
income from cross-border e-commerce transactions?
2. Is there a need to create new definition and meaning of
permanent establishment (PE)?
3. Is there a need to change the basis of taxation (for
example, residence-based taxation)?
4. While considering taxation of e-commerce transactions,
should principles of tax neutrality be adhered to?
Source: NDA Background Paper on E- Commerce

8. • Challenges
• Indian Initiative
• Global Initiative
• Raghuram Rajan’s statement
• Ministry of Commerce Meeting

9. Decisions and Actions taken by Taxing/
Enforcement Authorities

10. Conclusions
• E-commerce is dynamic and is throwing up new
business models at a fast pace. It is imperative
that tax laws/ administration keep pace meeting
the challenges posed by such models to ensure
appropriate taxation.
• More clarity on tax laws
• GST
• 1998 Ottawa Ministerial Conference on Electronic
Commerce and accepted by OECD’s BEPS Action 1