'Voluntary code for e-retailers can curb illicit trade'

18 Jan '16
3 min read

The Central Board of Excise and Customs (CBEC) is mulling a voluntary code of practice for e-retailers to curb illicit trade involving the sale of fake products on e-commerce platforms.

"New challenges are emerging for customs. E-commerce is one such major area of vulnerability. E-commerce in India provides an unparalleled platform for sellers of both genuine and counterfeit products. So, we are looking at possibility of introducing voluntary code of practice for e-retailers," Central Board of Excise and Customs (CBEC) Chairman Najib Shah said at an event organised by Ficci in New Delhi.

The easy concealment of identity encourages sale of counterfeit products on the e-commerce platform. At times, intermediaries are denied judicial protection in the absence of strong law, he said. To address the challenges posed by e-commerce trade, Shah said CBEC will discuss with stakeholders the possibility of introducing voluntary code of practice for e-retailers to fight illicit trade.

The CBEC chief said smuggling and counterfeit activities are matters of concern for the government. "This game is done at the cost of the honest tax payers. Though it results in financial gain to the person infringing the law but it is a financial loss to the exchequer," Shah said. He also stressed on the intellectual property rights and called for structured interaction between the customs and stakeholders on this issue.

According to a report titled 'Emerging Challenges to Legitimate Business in the Border-less World', prepared by tax and advisory firm Grant Thornton and Ficci, online marketplaces have become a "preferred hub for illicit operations" owing to their wider reach and ease of access. E-commerce majors including Alibaba, Amazon and SnapDeal, etc have been at the receiving end of imitation products offered by third parties not connected to the brand owner, the report said and suggested e-retailers to put in place an holistic anti-counterfeit policy. The report also called for a separate law for e- commerce to check illegal trade.

"In the absence of a specific e-commerce legislature in India and other laws including the Information Technology Act, Indian Companies Act, Companies Act 2013, Intellectual property, laws in copyrights and trademark etc, there are certain grey areas. Thus, there is a need for a separate e- commerce law in the country," the report said. (SH)

Fibre2Fashion News Desk - India

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