E-commerce is now covered under the Consumer Protection Act and the central government is not facing any loss in indirect tax revenue due to expansion of online retail business, stated Minister of State for Food and Consumer Affairs Raosaheb Patil Danve.
Patil Danve stated, "E-commerce operations are already covered under the Consumer Protection Act, 1986," in a written reply to the Lok Sabha.
Patil Danve was replying to a query whether there is any proposal to bring e-commerce operations under the Consumer Protection Law in view of complaints of cheating and other malpractices by such companies. Danve stated that trading of goods by e-commerce does not attract levy of service tax.
"Goods which are imported/manufactured are cleared on payment of duty of customs/central excise, as the case may be, at the time of import/clearance from the factory.
"Therefore, as far as the Central Government is concerned, there is no loss to indirect tax revenue due to expansion of e-commerce," Danve said.
The Consumer Protection Act provides protection of consumers interest. The government has already set up consumer forums to settle consumer disputes. Now, the government is planning to further strengthen this law, by introducing amendments to the Consumer Protection Act (CPA) 1986 in the ongoing Winter session of Parliament.
According to a recent study by Google the Indian online shopping segment is around $35 million and is expected to reach $15 billion by 2016. The internet giants says that India will have over a 100 million online shoppers by 2016. Google says that the growth will be driven with the increased penetration of mobile phones and Internet in the country.