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Consumer Protection (E-Commerce) Rules, 2020

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Consumer Protection (E-Commerce) Rules, 2020

On 23rd July 2020, the Government has notified the Consumer Protection (E-Commerce) Rules, 2020. The rule basically aims to prevent the unfair trade practice in an E-commerce business, direct selling, and protect the interest and rights of the consumers. The current article briefly highlights the Consumer Protection (E-Commerce) Rules, 2020 (hereinbelow referred to as the Rules).

Applicability and non-applicability of the Rules

The Rules shall apply to the following-

  1. All goods and services bought/ sold via an electronic or digital network,
  2. All the e-commerce models (which also includes marketplace models and inventory models),
  3. All e-commerce retails.
  4. All the forms of unfair trade practices prevailing in the e-commerce models.
  5. All the e-commerce entities not established in India but offering goods/ services to the consumers of India.

The Rules shall not apply to any activity of a natural person, which is being carried out in a personal capacity (i.e., the same is not part of a professional or commercial business).

List of dos’ and don’ts of an e-commerce entity

Rule 4 of the Consumer Protection (E-Commerce) Rules, 2020 defines the list of dos’ and don’ts of an e-commerce entity, which are tabulated hereunder-

Dos’ Don’ts
An e-commerce entity should be incorporated as a company under the appropriate law. An e-commerce entity should not adopt any unfair trade practices.
An e-commerce entity should appoint a nodal contact person or a senior designated functionary. The appointed person should be an Indian resident and ensure compliance with the provisions of the Consumer Protection Act and the rules made thereunder. An e-commerce entity should not impose cancellation charges on any consumer cancelling the purchase unless the charges are also borne by the entity.

An e-commerce entity should clearly display the following information on its platform-

·        Legal name,

·        Address of the headquarter and all its branches,

·        Name and address of the website, and

·        Contact details (i.e., e-mail ID, landline number, mobile number, fax, etc.) of the Customer Care and grievance officer.

An e-commerce entity should not discriminate between the consumers of the same class or make any arbitrary (random) classification of consumers affecting their rights.
An e-commerce entity should establish an adequate grievance redressal mechanism. An e-commerce entity should not manipulate the price of the goods/ services to gain unreasonable profit by imposing an unjustified price on the consumers.
An e-commerce entity selling the imported goods/ services should mention the name and detail of the importer. _

List of dos’ and don’ts of sellers on the marketplace

The dos’ and don’ts of the seller offering goods/ services via marketplace e-commerce entity are tabulated hereunder-

Dos’ Don’ts
The seller should have a prior written contract with the e-commerce entity. The seller should not adopt any unfair trade practices.
The seller should appoint a grievance officer. The seller should not falsely represent itself as a consumer and post reviews about the goods/ services. Further, the seller should not misrepresent the features or quality of the goods/ services.

The seller should provide the following information to the e-commerce entity to be displayed on its platform/ website-

·        Contractual information as required to be displayed by law.

·        The total price of goods/ services together with the breakup of the same.

·        Details of goods/ services offered for sale (including details of the country of origin).

·        Name, contact number, and details of grievance officer.

·        Details regarding terms of exchange, refund, and return policies, etc.

·        Details regarding the delivery and shipment of goods/ services.

·        Details regarding guarantees/ warranties, if any, applicable to the goods/ services.

If the goods/ services are not of the characteristics/ features as advertised or defective, the seller should not refuse to take back the goods or withdraw/ discontinue the service.

List of dos’ and don’ts of an inventory e-commerce entity

An inventory e-commerce entity is defined under rule 2(f) of the Consumer Protection (E-Commerce) Rules, 2020. It means an e-commerce entity that owns the inventory of goods/ services and sells such goods/ services directly to the consumers. The dos’ and don’ts of such inventory e-commerce entity is tabulated hereunder-

Dos’ Don’ts

An inventory e-commerce entity shall clearly provide the following information-

·        Contractual information to be displayed as per law.

·        Mandatory notices and information as per law.

·        The total price of goods/ services together with the breakup of the same.

·        Information regarding return policy, refund, warranty and guarantee, exchange, delivery, and shipment, available mode of payments, cost of return shipping, etc.

An inventory e-commerce entity should not falsely represent itself as a consumer and post reviews about the goods/ services. Further, the inventory e-commerce entity should not misrepresent the features or quality of the goods/ services.
An inventory e-commerce entity should ensure that the advertisement of goods/ services is based on actual characteristics, access and usage conditions of the goods/ services. If the goods/ services are not of the characteristics/ features as advertised or defective, the inventory e-commerce entity should not refuse to take back the goods or withdraw/ discontinue the service.
Consumer Protection (E-Commerce) Rules, 2020

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CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.