E-Commerce Act Nepal 2025: Legal Framework, Compliance, and Penalties

Introduction

In a rapidly evolving digital economy, Nepal has taken a monumental leap by enacting the E-Commerce Act, 2081 B.S. (2025 A.D.), establishing its first comprehensive legal framework for regulating online trade. As e-commerce gains momentum and becomes a lifeline for businesses and consumers alike, this legislation aims to ensure accountability, consumer protection, and clarity for all stakeholders involved in the digital marketplace. The Act addresses long-standing concerns around fraud, data privacy, unfair practices, and the ambiguity that once plagued Nepal’s digital ecosystem.

With penalties as steep as NPR 500,000 or three years imprisonment, the law signifies the government’s seriousness about building a secure and trustworthy e-commerce environment. This article breaks down everything businesses, intermediaries, consumers, and legal professionals need to know about the new E-Commerce Act in Nepal.

Objectives and Scope of the Act

The E-Commerce Act 2025 aims to:

• Regulate all forms of digital trade, including goods and service transactions.

• Enhance consumer protection and establish grievance mechanisms.

• Foster transparency and reliability in online transactions.

• Support small and cottage industries transitioning to digital platforms.

• Provide clear legal responsibilities and liabilities for each party involved in e-commerce.

Who Does This Apply To?

• Any person/entity operating within or outside Nepal that offers products or services to customers in Nepal via an electronic platform.

• This includes websites, mobile apps, social media platforms, and other digital interfaces.

Key Definitions Under the Act

E-Commerce Business Registration and Platform Requirements

Mandatory Registration:

All e-commerce businesses must register their platforms with the Department of Commerce, Supplies and Consumer Protection (DoCSCP) within 3 months of the law’s enactment.

Registration Includes:

• Business name and registration certificate

• PAN/VAT number

• Contact information (email, phone, address)

• Details of office, branches, or warehouses

• Customer support and grievance contact

• Platform type (marketplace or direct seller)

Micro and cottage industries are exempt from platform setup but must operate via registered marketplaces.

Contract Validity and Electronic Transactions

The Act legally recognizes electronic contracts, including click-wrap agreements and digital signatures. These contracts must clearly define:

• Return and refund policies

• Warranty and guarantee terms

• Delivery timelines and cancellation terms

This provision ensures enforceability and builds legal trust in digital transactions—key for both consumers and cross-border digital trade.

Return, Refund & Cancellation Policies

Buyers are entitled to a full refund, including taxes, if:

• The goods/services do not match descriptions

• Delivery is delayed without valid reason

• Product quality is compromised

Exchanges are allowed if mutually agreed. Sellers cannot deny refunds in cases where goods are misrepresented.

Exceptions (aligning with CPA 2075):

• Perishable goods

• Customized/personalized products

• Items with broken seals (cosmetics, health products)

Mandatory Information Disclosure on Platforms

Failure to update platform information within 48 hours of changes may result in a fine of NPR 20,000 to 100,000.

Parties Involved in E-Commerce & Their Duties

Table 1: Classification of E-Commerce Participants

Table 2: Duties of Parties and Legal Penalties

Data Protection and Privacy Obligations

All businesses must:

• Protect personally identifiable information (PII) of consumers.

• Allow users to update or disable their personal data.

• Transfer data only for transaction-related purposes, in accordance with law.

Violations may attract legal action under both this Act and the Data Protection Bill (once enacted).

Delivery Responsibilities

• Businesses are directly responsible for delivery as per contract.

• Delivery personnel must comply with CPA 2075 obligations.

• Payments to transporters are considered payments to sellers.

Grievance Redressal and Enforcement

Each platform must:

• Provide an electronic complaint mechanism

• Respond within 15 days

• Maintain a log of grievances and resolutions

Additionally, DoCSCP will conduct routine audits and inspections to ensure compliance. Non-compliant businesses may be deregistered or blacklisted.

Penalties and Enforcement

Legal Intersection with Other Laws

The Act complements and aligns with the following:

• Consumer Protection Act, 2075 – Refunds, misleading ads, product labeling

• Electronic Transactions Act, 2063 – Validity of e-contracts and digital signatures

• Companies Act, 2063 – Legal registration of businesses

• Value Added Tax Act, 2052 – VAT compliance on online transactions

• Cyber Security Bill – Data protection and digital infrastructure safety

Challenges and Criticism

While the E-Commerce Act is landmark legislation, several stakeholders have raised concerns:

• Overburdening platform operators for actions of third-party sellers

• No clear distinction between C2C, B2C, and B2B models

• Unclear provisions for small social media sellers

• Redundant platform-level labeling for items already labeled under CPA

These issues highlight the need for further amendments and consultation with e-commerce industry leaders.

Way Forward: Ensuring Digital Growth with Legal Certainty

To ensure successful implementation:

• The government must initiate public awareness campaigns.

• Technical training should be provided for compliance officers and SMEs.

• Stakeholder feedback must be incorporated into future amendments.

• Public-private partnerships should be leveraged to streamline logistics, payments, and grievance mechanisms.

• Clarity must be provided on cross-border compliance, especially for Nepali entrepreneurs operating internationally.

Conclusion

The E-Commerce Act Nepal 2025 is a bold step toward legalizing and securing Nepal’s digital commerce ecosystem. It balances consumer rights, business obligations, and technological realities, aiming to ensure safe, fair, and efficient online transactions. However, for Nepal to truly thrive as a digital economy, continued refinement, industry dialogue, and robust enforcement are imperative.

As online transactions become the norm, legal compliance is no longer optional—it’s essential for sustainability, consumer trust, and long-term growth. Businesses that act now to align with the E-Commerce Act will not only avoid penalties but position themselves as leaders in Nepal’s digital future.