Government Plans Regulator For E-Commerce, Mandatory Data Localization and Tax Sops For Data Centres

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New Delhi:A regulator has been planned by the government to ensure consumer protection and compliance with foreign investment caps in e-commerce. The national regulator for e-commerce, mandatory data localization and tax sops for data centres are part of an upcoming legislation governing all aspects of electronic commerce in the country, the draft of a national policy showed.

The national policy framework in this regard, prepared by a task force headed by commerce secretary Rita Teaotia, was discussed on Monday by a think tank, headed by industry minister Suresh Prabhu, set up for the purpose. The draft will be further fine-tuned before it is sent for inter-ministerial consultations.

The government has been striving to build consensus on an e-commerce policy to mitigate the policy vacuum on key issues related to the sector as well as to effectively respond to a proposal for multilateral discipline in e-commerce at the World Trade Organization (WTO) as various government departments have contradictory views on the matter.

While the draft e-commerce policy has strongly recommended data localization, it has suggested a two-year sunset period for the industry to adjust before localization rules becomes mandatory. It has also suggested direct and indirect tax incentives as well as according infrastructure status to data centres to encourage domestic data storage.

The move will help private sector companies comply with the norms laid down by the Srikrishna committee on data localization. The 10-member expert group headed by former Supreme Court judge BN Srikrishna, which submitted the draft bill titled The Personal Data Protection Bill, 2018, to the ministry of information and technology (MeitY) on Friday necessitates companies to store a copy of a user’s personal data in the country.

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