Understanding Nepal's Ecommerce Act, 2080

Understanding Nepal's Ecommerce Act, 2080

As electronic commerce (e-commerce) transforms how goods and services are bought and sold worldwide, countries are introducing new legislation to manage this digital shift. Nepal’s Ecommerce Act, 2080, was enacted by the Federal Parliament to ensure a systematic framework for e-commerce, enhancing consumer trust and creating clear rules for all parties involved.

This blog explores the key aspects of the Act, including rights, obligations, penalties, and protections designed to regulate e-commerce in Nepal.

Section 1: Preliminary Provisions

The Act, officially named Electronic Commerce Act, 2080, applies nationwide and includes Nepalese consumers and businesses residing outside the country who participate in e-commerce. Definitions clarify key terms such as Consumer, Buyer, Delivery Agent, Intermediary Business, and Electronic Platform. These definitions set the foundation, ensuring all parties understand their roles and responsibilities.

Key Definitions

  1. Consumer: An individual who uses goods or services.
  2. Buyer: A person purchasing goods or services.
  3. Seller: A business or person providing goods or services.
  4. Electronic Platform: Any technology-based platform, like websites or apps, where goods or services are bought and sold.

Section 2: Regulation of Electronic Commerce

Permissibility of E-commerce Activities

Businesses legally authorized to trade goods or services can conduct their business online. However, the government reserves the right to restrict certain items from being sold online, if deemed necessary.

Establishment of Electronic Platforms

Each e-commerce business must establish an electronic platform that provides transparent details like:

  • Business name and registration number.
  • Contact details.
  • Type of business (intermediary or list-based).

Changes to these details must be updated on the platform within 24 hours to ensure transparency for consumers.

Registration Requirement

Businesses establishing an electronic platform must register it with the Department of Commerce, Supplies, and Consumer Welfare Protection. Existing e-commerce entities must register within three months of the Act’s enactment. The department issues a unique registration number to each platform, which businesses are required to update promptly if their information changes.

Disclosure of Information

E-commerce platforms must disclose all relevant information about their goods and services, including:

  • Product specifications.
  • Final price with taxes.
  • Delivery time.
  • Return or refund conditions.

This transparency helps consumers make informed purchasing decisions, fostering trust in the e-commerce ecosystem.

Section 3: Contractual and Financial Obligations

Contract Agreement

Contracts established electronically are legally binding. Businesses must disclose all essential information, such as cancellation policies, refund terms, and warranties, to buyers before the contract is concluded.

Payment Process

Buyers are required to pay at the agreed price upon receiving goods or services. Payments must be acknowledged immediately. If foreign currency is involved, transactions should adhere to Nepal’s foreign exchange laws.

Transfer and Delivery

The Act obligates businesses to deliver products on time and as specified. Changes in delivery terms can be negotiated with the buyer, but any additional charges may apply. The responsibility for delivery, if outsourced, remains with the business entity.

Section 4: Consumer Rights and Obligations

Return and Refund Policy

Consumers can request returns, and businesses are required to refund or exchange the item based on the agreed terms. If a substitute item is rejected, a full refund is necessary.

Confidentiality of Personal Information

Businesses must maintain the confidentiality of consumer information, using it only for transaction purposes unless authorized by law. Consumers have the right to access and modify their personal information on the platform.

Buyer Obligations

Consumers must honor contractual obligations, avoid causing harm to the e-commerce platform, and promptly report any product issues.

Section 5: Obligations of E-commerce Entities

Obligations of Intermediary and List-Based Entities

Intermediaries must ensure accurate information about listed goods and services and avoid preferential treatment toward specific sellers. List-based e-commerce entities must not mislead consumers through false advertising or impersonate buyers.

Seller Obligations

Sellers need to enter agreements with intermediaries, provide accurate registration details, and avoid manipulating reviews or ratings on the platform.

Section 6: Penalties and Enforcement

Offenses and Penalties

Offenses under the Act include:

  1. Operating an unregistered e-commerce platform.
  2. Failing to disclose accurate information.
  3. Breaching buyer and seller obligations.

For minor violations, fines range from NPR 10,000 to NPR 50,000. Severe breaches, such as intentional fraud or misconduct, can result in fines up to NPR 500,000 or imprisonment for up to three years.

Complaint and Appeal Process

Consumers or businesses can file complaints about violations, which are handled by an inspecting officer. Appeals against fines can be made to the Director General within seven days, with a final decision rendered within 35 days.

Confidentiality and Unauthorized Commercial Activity

Businesses cannot misuse consumer data, nor can they engage in unauthorized or inappropriate activities. Violations are prosecutable, with the government as the plaintiff in such cases.

Section 7: Supervision and Miscellaneous Provisions

Supervision and Inspection

The Department oversees e-commerce activities, including periodic inspection and enforcement of IT standards for e-commerce platforms.

Adherence to Consumer Protection Laws

The Act aligns with consumer protection laws, allowing modifications as necessary to maintain product quality, labeling, refund policies, and consumer rights.

Confidential Complaints and Issuance of Guidelines

Complaints can be submitted anonymously, and the Ministry may release additional guidelines to support the effective implementation of the Act.

Conclusion

The Electronic Commerce Act, 2080 serves as a significant advancement in Nepal’s e-commerce industry. By setting clear standards for registration, transparency, data confidentiality, and fair trade practices, the Act aims to create a secure and trustworthy environment for e-commerce. For businesses, it provides a structured regulatory framework, while consumers benefit from enhanced protections and reliable services, helping Nepal move toward a more robust digital economy.