Business start up on social media: The Need of effective and uniformed E-commerce rules

After 40 years of our independence if we try to collect a proper statistics of employed people or in plain simple words ‘ people who are earning money in our country, we may not find one. We are always talking about the unemployment problems and the scarcity of job in job market. If we look around us and observe we will see that the tendency of woman to be educated to be a teacher or a doctor has been reduced. We can see the housewives starting all over again and making money which is sometimes not enough but to do well for themselves. And the main tool is online business to be specifically Face book. Handcrafted clothes to accessories, cosmetics, shoes, bags, foods, beauty services and what not. If we start counting we’ll have thousands of entrepreneur most of which are women. And with days passing by this number will increase and as well as the number of consumers too. But this whole number is not being included in any official statistics and we are missing out on a progress which needs to be addressed and backed up by the government, which will eventually benefit the seller and consumer sides as well as the whole country.

It may initially look like you are exempted from legal requirements if you are starting up your business online. When the question of legal requirements come the first thing to look up for is a general trade license. An online or brick-and-mortar, business is irrelevant, a business requires a license. In Bangladesh Trade License was introduced under The City Corporation taxation rules, 1983. It is issued by the local government when an entrepreneur applies though the license form. Facebook doesn’t require a business license to open a page but one must need to know about the local legal regulations and adhere to them to keep their business healthy. This will minimize the risk of the business and serve many other purposes too. It will get us an idea of self employed people, specially woman who are making a contribution in the society. More than anything else it’ll give the legal status which itself is an immune to so many problems. Our woman will be empowered in the right way. And by doing so we can include these women as a contributor to our economy if they pay the tax in the coming year.

Now, if we observe from the consumer’s side, there was no specific law in Bangladesh on the protection of consumer’s right for very long. The present government has enacted a “Consumer Rights Protection Act, 2009” on 6th April, 2009. There is no special law or Act covering the rights of online consumers in our country. If we scrutinize the consumer rights according to the Consumer protection rights act, 2009, we will find that everyday the consumers rights are being breached which they themselves are not aware of. In section 2(20), some acts against consumer rights are stated. According to this law “Deceiving people in general by false and untrue advertisement with the purpose of selling and product or service” is regarded as the acts against consumer rights. This is one of the consumer rights which are being breached on a regular basis. The advertisements of the products are mostly done in face book groups and the group admins have this deal with the sellers. If any customer gives a negative review, most of the times it is not allowed to be there or the customer gets banned from the group. In the Consumer Protection Act of 2009, no individual complaint can be entertained by the court without written permission of the Director General of the Consumer Rights Protection Department. So in that case the right to get compensation (which is recognized as a consumer right internationally) is being breached. In our neighbouring countries India, Malaysia, Srilanka and Nepal have extensive consumer protection legislation, they have a separate court to entertain the cases regarding consumer rights.To include more the personal information of the customers are also not being safeguarded. Most of the transactions are made through bkash and products are delivered through courier services. If the package gets lost then the courier service company doesn’t bear any responsibility. In this case there is no remedy. Apart from the above mentioned rights, everyday people are falling in the trap of fraud sellers. If these rights of the consumers could be protected, the sellers would be benefitted too. There would be more consumers and e-commerce of our country would develop.

In countries like USA, Australia, KSA to conduct a business online one must have a license or otherwise they are fined. They have to abide by the local laws. In some cases they do need to pay sales taxes. The U.S. Supreme Court ruled in Quill Corporation v North Dakota that merely conducting business with customers who live in a particular state was not sufficient grounds for a state to force that company to collect sales tax on its behalf. However, another Supreme Court case, Wisconsin Department of Revenue v. William Wrigley Jr., Co., stated that maintaining a “nontrivial” presence in a state does subject an online business to the requirement to collect sales tax for that state, even if its main operations are located elsewhere. In these countries there is one Employer Identification Number whether the business is online or offline. But in our country there is no such thing and employers are hired through facebook. They sell products and advertise for them and in return get paid that too through Bkash account. In USA there is a small business administration which look after these business. In our country we have e-CAB ( e-commerce association of Bangladesh) and to be a member of which a trade license is required and e-CAB and government can give support to these business. To become a member of e-CAB there are certain criteria and one of which is to be officially registered. According to the statistics of e-CAB at present there are over 10,000 Face book pages operating businesses in Bangladesh, among which only 100 pages are affiliated with it, and other 674 members only. Recently, e-CAB has asked for ten years tax holiday for this sector. As this sector is fast growing, making the trade license mandatory can help to build up an organized e-Commerce sector in the coming years.

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Tanjina Rahman Priti

Tanjina Rahman Priti is a second year Law student of Chittagong University.