Policy Wrap: National e-commerce policy may be announced soon, CBDT clarifies applicability of TDS on ONDC, developments regarding AI and Deepfakes, and more
National e-commerce policy may be announced soon, is in its final stages
The Union Minister For Commerce and Industry, Government of India, Shri Piyush Goyal stated on Thursday, 28th of December, 2023, that the planned National e-commerce policy being developed by the Government of India is nearing completion and will be unveiled very soon. The proposed regulation was the subject of an in-depth discussion back in August 2023 between representatives of e-commerce companies and a domestic traders' association, and it was hosted by the Department for Promotion of Industry and Internal Trade (DPIIT).
The government had already released two national e-commerce policy drafts previously.
The 2019 draft planned to address six main sectors of the e-commerce ecosystem, namely data, infrastructure development, e-commerce marketplaces, regulatory challenges, promoting the local digital economy, and export promotion through e-commerce.
Through a simplified regulatory framework for ease of doing business, adoption of contemporary technologies, integration of supply chains, and increased exports through this medium, the e-commerce policy seeks to prepare strategies for creating an environment that is favourable for the inclusive and harmonious growth of the e-commerce sector.
The National e-Commerce Policy's general framework aims to distinguish clearly between the marketplace and a warehousing-based model.
CBDT clarifies the applicability of TDS liability for online retailers for orders placed on ONDC
On Thursday, the income tax authorities provided clarification regarding the TDS liability of online businesses using the ONDC. According to the FAQ released by the Central Board of Direct Taxes (CBDT), convenience, packaging, and shipping fees charged by e-commerce trading platforms for orders placed on ONDC shall be included in the gross sale amount and a 1% TDS will be deducted from it.
The Department for Promotion of Industry and Internal Trade (DPIIT) launched the ONDC as a new initiative, and due to that, the CBDT had received comments asking for clarification on who is responsible for complying with IT rules regarding Tax Deducted at Source (TDS).
As mandated by law, all e-commerce companies must deduct TDS at the rate of one percent on the total sales amount of products or services sold on their platform.
The CBDT has made it clear that when several e-commerce operators (ECOs) are using the ECO platform to complete a single transaction, the supplier side must complete the TDS compliance before the payment is released to the supplier.
Cyber risks take the top spot as the biggest threat faced by Indian organizations
According to PwC's 2023 Global Risk Survey - India’s survey, cyber threats are the biggest concern that Indian organizations face, with 38% of respondents feeling highly or severely exposed to them. As a result, compared to 2022, cybersecurity has risen from number three to number one on the risk radar. 35% of business leaders in India are also very concerned about other digital and technological risks.
According to the results, 55% of the respondents want to invest in cybersecurity tools and AI, machine learning, and automation technologies in the next one to three years to address the difficulties faced by Indian companies.
71% of Indian organizations are collecting and analysing IT and cybersecurity data for risk management and opportunity identification to support these investments. 61% of businesses worldwide implement the same practice.
The report shows that not only are Indian business leaders showing a greater willingness to take risks, but they are also reasonably adept at identifying the opportunities that risks present.
Additionally, the survey revealed that 99% of Indian corporate executives are optimistic about their company's ability to successfully manage risk and balance growth.
When it comes to generative AI (GenAI), 69% of Indian executives view it as an opportunity, compared to 60% globally, indicating that Indian firms view technology disruptors as opportunities.
The report also showed how businesses are using cutting-edge technology like GenAI for risk management, with 48% of Indian businesses using AI and machine learning extensively for automated risk assessment and response.
Government of India issues advisory to social media platforms to comply with IT rules regarding deepfakes and misinformation
With a focus on deepfake technology-fuelled misinformation, the government on Tuesday sent out another advisory to all social media and internet intermediaries, including WhatsApp, Instagram, Facebook, and Google, urging strict adherence to the current IT regulations.
Shri Rajeev Chandrasekhar, Minister of State for Ministry of Electronics and Information Technology (MeitY), Government of India, stated that “a formal advisory has been issued incorporating the ‘agreed to’ procedures to ensure that users on these platforms do not violate the prohibited content in Rule 3(1) (b) and if such legal violations are noted or reported then the consequences under the law will follow.”
According to the IT Ministry, platforms were not adhering to the guidelines about content that was prohibited, concerning deepfakes and misinformation.
Hon’ble minister emphasized that the ministry will "closely observe" how social media and internet intermediaries are adhering to these guidelines over the coming weeks and will bring in changes to the IT Rules or legislation as needed.
All businesses have been required by the IT Ministry to provide an "action-taken-cum-status" within a week. The move to issue the advisory is the most recent in a string of letters and notifications that intermediaries have received requesting that they abide by the rules that forbid hosting, displaying, or disseminating specific types of content, such as images of child sexual abuse, pornographic material, or advertisements for unlicensed loan applications on their network.
Platforms are expected to take more steps to allow the promotion of illicit lending and gambling apps that have the potential to scam and mislead users. The advisory read that the intermediaries will have the sole responsibility for any consequences.
IT Ministry seeking inputs to build responsible AI
To create locally developed "tools and frameworks" that support the just and ethical development of artificial intelligence across themes like machine unlearning, synthetic data generation, fairness tools, bias mitigating strategies, and others, Government of India has invited proposals from academic institutions and research and development organizations.
According to the proposal paper, machine unlearning algorithms aid in the elimination of unwanted learned behaviours, which advances the creation of more precise, dependable, and equitable AI systems in a variety of fields.
The applications will be accepted from government-run establishments with pre-existing lab infrastructure, including workstations, servers, and other dedicated staff, such as the Indian Institute of Technology (IIT), the National Institute of Technology (NIT), Indian Institutes of Information Technology (IIIT), R&D, and private academic organizations.
However, these institutions must demonstrate that the project will be completed in the next two years and guarantee that it aligns with the main objective of encouraging the ethical and just application of AI. By January 12th, 2024, the proposals must be submitted to the Ministry of Electronics and Information Technology (MeitY).
Meanwhile, Indian businesses are also gearing up for responsible AI adoption.
According to a report by the industry group NAASCOM, about 60% of businesses say that they have either started formal measures towards adopting such responsible practices or have already established Responsible AI (RAI) policies and practices. About 30% of respondents said they were only vaguely aware of the RAI imperatives and lacked a defined plan or structure.
Industry leaders are working extensively to invest in cutting-edge RAI technologies and methods while prioritizing openness in their AI activities due to the growing demand for RAI among AI users and stakeholders.
As Responsible AI adoption continues to evolve, large-scale implementation and adoption are contingent upon the resolution of multiple technical, commercial, and regulatory obstacles.
The largest obstacles to RAI adoption continue to be the lack of access to high-quality data and the shortage of qualified technical and management staff, even as businesses continue to focus on trust and transparency in the commercial development and use of AI and AI-enabled technologies.
Thanks for reading ADIF! Subscribe for free to receive new posts and support our work.