Understanding the E-Commerce Act 2025: Legal Obligations for Digital Businesses in Nepal

The E-Commerce Act, 2025 came into effect on 16 April 2025, introducing Nepal’s first comprehensive legal framework for regulating online trade and digital commercial activities. This landmark legislation aims to promote transparency, protect consumers, and ensure accountability in the fast-growing digital economy.

For companies operating or entering the digital marketplace, understanding the legal obligations under this Act is essential.

1.      Who Is Covered Under the E-Commerce Act?

• The Act applies across Nepal and also extends to foreign individuals or entities providing goods or services in Nepal via digital means.
• It covers electronic platforms, list-based businesses, intermediaries, and any service providers using online platforms for commerce.

2.      What Is an “Electronic Platform”?

The law defines an electronic platform as any system (website, app, software, etc.) used for conducting digital transactions. Simply promoting goods online without selling them does not qualify as e-commerce.

3.      Mandatory Setup of an E-Commerce Platform

Businesses must:

• Set up a valid electronic platform.
• Display key details like business name, registration, tax numbers (VAT/PAN), contact info, license details (if any), and grievance redressal contacts.
• Update platform information within 48 hours of any change.

4.      Listing on Government's E-Commerce Portal

To legally operate, businesses must:

• Apply for listing on the Department of Commerce, Supplies and Consumer Protection’s e-commerce portal.
• Provide business and director details, platform info, tax registration, and branches/outlets (if any).
• Existing businesses had 3 months from the Act’s commencement to comply.

5.      Disclosure Requirements on Goods & Services

All businesses must disclose the following on their platform:

• Full product/service details (design, warranty, pricing, origin, etc.).
• Delivery terms and timelines.
• Payment methods and return/refund conditions.
• Key terms of contract in user-friendly language.
• Mechanisms for ratings, reviews, and grievance handling.

6.      Contractual Validity of E-Commerce Transactions

• Contracts formed via e-commerce are legally valid and binding under Nepalese law.
• All contract-related obligations including returns, refunds, warranty, and cancellation must be clearly communicated.

7.      Delivery & Return Obligations

• Goods/services must be delivered as per the agreed time and method.
• Buyers can return products if they don’t match the description, and sellers must refund or replace accordingly.
• No conditions can be imposed on such returns, and the entire purchase amount must be refunded, including taxes.

8.      Confidentiality of Consumer Data

E-commerce businesses must:

• Maintain confidentiality of personal data.
• Not share or misuse personal information except under prevailing laws.
• Allow users to manage and protect their data visibility.

Violations are punishable under law.

9.      Licensing & Sector-Specific Permits

If a product/service requires a license under any law (e.g., telecom, pharma), e-commerce businesses must obtain the necessary approvals before listing or selling such goods/services.

10.    Additional Obligations for List-Based E-Commerce Businesses

Such businesses must:

• Avoid misleading advertising.
• Not submit fake reviews or ratings.
• Fulfill warranty commitments.
• Preserve transaction records per tax law.
• Process refunds or replacements for delayed, defective, or misrepresented products.

11.    Seller Responsibilities on Third-Party Platforms

• Sellers using intermediary platforms must:
• Enter written/electronic agreements with the platform.
• Provide valid registration and tax details.
• Ensure timely delivery and authenticity of products.
• Not pose as consumers to manipulate ratings or reviews.

12.    Offenses and Penalties

The Act lists the following as offenses:

• Operating without an electronic platform or government listing.
• Non-disclosure of product/service details.
• Misleading information, false advertising, and failure to meet delivery or refund obligations.

Penalties:

• Minor offenses: NPR 20,000 to 100,000.
• Severe offenses: NPR 50,000 to 500,000 and/or 6 months to 3 years of imprisonment.

13.    Grievance Redressal Mechanism

Businesses must:

• Accept complaints via electronic, written, or in-person means.
• Register and respond to complaints promptly.
• Resolve issues within 15 days.
• Implement an online complaint management system.

14.    Technical & Legal Compliance

• All platforms must adhere to standards set by Nepal’s IT regulatory authority.
• Where not explicitly covered by this Act, the Consumer Protection Act governs areas like quality, labeling, pricing, compensation, and dispute resolution.

The E-Commerce Act 2025 establishes a firm legal foundation to regulate Nepal's digital market. Businesses like Ncell and others involved in digital trade must ensure full compliance with its requirements from platform setup to dispute resolution mechanisms.

For questions or legal guidance regarding compliance under the E-Commerce Act 2025, please feel free to contact our legal team.