While India can maintain a liberal regime on electronic transmissions at present, this must not “preclude its options for possible methods of taxation since future course of growth in e-commerce is impossible to visualise,” said the survey.

“As and when viable methods of levying duties and taxes can be found, there should be freedom to impose customs duties, excise duties, sales tax etc on electronic transmissions,” it added.

E-commerce comprises of business among enterprises (B2B) and companies to consumers (B2C), with the former accounting for a large proportion of such trade globally. Ban on customs duty is applicable to digitised products, which mostly fall under B2C category and broadly include printed matter, software, music and other media, film and video games.

In the past, such goods were transported through carrier media in the form of CDs, diskettes, tapes etc and were subjected to customs duty in importing country. But now, these products are sent electronically without being subject to any customs duty. “With trade in this segment growing rapidly, most of the developing countries are becoming net importers of digitised products,” it noted.

Inherent advantage

“India’s position on non-imposition of customs duty on electronic transmission has been that given the inherent advantage India has in e-commerce, it can maintain a liberal regime (at present),” it said.

Since e-commerce differs from normal trade in goods, there is a need to develop a specific trade policy for such transactions, it said, adding that the matter is a complex one as such trade is linked with several other WTO agreements.

The survey observed that developed and developing countries are equally concerned over the revenue implication of e-commerce.

As per comprehensive working definition agreed by the WTO General Council, electronic commerce means “the production, distribution, marketing, sale or delivery of goods and services by electronic means”.

Electronic transactions involve three stages namely searching, ordering/making payment and delivery of products, it noted.