Walk through Nepal's social-media feeds and you'll find as much retail happening in Instagram DMs and Facebook comment sections as on any dedicated storefront. For years, that informal channel operated in a legal grey zone. The Electronic Commerce Act, 2081 doesn't erase that grey zone entirely, but it does draw a much sharper line around what counts as regulated e-commerce and what still doesn't. Read together with the Electronic Transactions Act, 2063, which already gives electronic records and digital signatures legal force, Nepal now has a fairly complete legal architecture for buying and selling online. This piece walks through what the new Act requires, who it applies to, and where the real compliance risk and the real gaps sit.
Who the Act Covers
The Act applies to the purchase and sale of goods or services through an “electronic platform” a website, app, or similar system used to collect, transmit, or store information for commercial transactions. Merely advertising a product online, without completing the purchase or sale through that platform, falls outside the definition.
Two categories of “businessperson” exist under the Act:
● Intermediary businesses platforms that facilitate sales for third-party sellers (marketplaces).
● Catalogue-based businesses a business that lists and sells its own inventory directly to consumers through its own platform.
The distinction matters because the two carry different though overlapping, statutory duties, covered below.
Only a firm, company, or entity already registered and licensed under existing law to trade in the relevant goods or services can conduct e-commerce (Section 3). The Government of Nepal also retains the power to prohibit specific goods or services from being sold electronically, by gazette notification.
The Social-Media Seller Gap
One definitional point is worth pulling out on its own. The Act excludes from “e-commerce” any electronic platform used only to inform or promote a good or service; the purchase or sale itself has to happen through that platform (Section 2(ठ). A large share of Nepal's informal online retail runs through Facebook posts, Instagram DMs, and WhatsApp orders, with the transaction actually closed over chat or phone rather than through a structured checkout. Read literally, a seller operating entirely that way may sit outside the Act's registration and disclosure duties even while competing directly with registered, disclosure-compliant businesses next to them.
Whether the Department reads “purchase or sale … through an electronic platform” to capture a DM-negotiated sale is an open enforcement question, not a settled one. Businesses building a serious online retail operation shouldn't rely on staying in that grey zone the safer, and more scalable, path is to register and disclose from the start, rather than wait for enforcement practice to catch up with the statute.
Platform and Listing Requirements
Every business conducting e-commerce must establish its own electronic platform (Section 4) with an exception for micro and cottage enterprises, which may operate through a third-party platform instead of building their own.
The platform must disclose a fixed set of details: business name, registration and PAN/VAT numbers, branch and outlet addresses, licence details for regulated activities, contact details for customer service and grievance handling, and once obtained the listing number described below. Any change to these details must be updated within 48 hours.
Separately, every platform must register (be “listed”) with the e-commerce portal maintained by the Department of Commerce, Supply and Consumer Protection (Section 5). Businesses already operating when the Act commenced had three months from commencement to apply; the Department must confirm listing within seven days of a complete application.
Product Disclosure and Contract Formation
Section 6 sets out a detailed disclosure list for every product or service offered: description and specifications, all-inclusive price, delivery charges, precautions, delivery timeline, payment method,
warranty terms, country of origin for imported goods, return conditions, and the grievance-handling mechanism, among others.
Where a buyer and seller (or a seller and the intermediary business) reach agreement electronically, Section 7 treats it as a valid contract under existing contract law anchoring back to the Electronic Transactions Act's recognition of electronic records. Businesses must still spell out, within that contract, terms for delivery, cancellation, exchange, refund, and warranty consistent with what Section 6 requires them to disclose upfront.
Payment, Delivery, and Returns
Payment can be collected before, during, or after delivery, including through a delivery person acting as the business's agent (Section 8); once the delivery person is paid, the business is treated as paid. All payments must run through instruments recognised under Nepal's payment and settlement law, and cross-border transactions must comply with prevailing foreign exchange regulations.
Delivery must happen at the time, place, and manner agreed in the contract (Section 9), and if the buyer or business wants to change any of that before dispatch, the change requires mutual consent.
If goods or services don't match what was disclosed under Section 6, the buyer can return them unused and undamaged, and the business must accept the return without conditions (Section 10). The buyer then chooses between a replacement of equal value or a full refund, including tax paid.
Data Privacy and Unfair Practices
Section 12 requires businesses to keep personal information of anyone involved in an e-commerce transaction confidential, and bars using or disclosing it except as legally permitted though sharing transaction-relevant information among buyer, seller, and delivery person for fulfilling that transaction is expressly allowed. Violation attracts penalties under prevailing law.
Section 19 prohibits unfair trade or business practices generally, without listing them exhaustively, leaving room for the Act to catch practices as they emerge.
One thing the Act does not do: create a dedicated data-protection regulator, a breach-notification timeline, or a comprehensive data-handling regime. Section 12 is a confidentiality duty, not a data-protection statute. Businesses collecting payment details, delivery addresses, and order histories
at scale should treat it as a floor, not a ceiling, and build controls access limits, retention limits, encryption that go beyond what Section 12 literally requires.
Distinct Duties by Role
The Act separates duties (Sections 14–16) for the three roles in a typical transaction:
Intermediary businesses must display accurate product details, honour warranties, avoid discriminating between sellers offering similar goods (unless disclosed), contract with sellers before listing their goods, and process returns, exchanges, or refunds when goods don't conform to the contract.
Catalogue-based businesses carry similar duties, plus a specific bar on posting fake reviews or ratings for their own listed goods (including through third parties posing as consumers) and a duty to disclose the actual origin, manufacturer, or service provider.
Sellers operating through an intermediary must contract with that intermediary before listing, supply the intermediary with registration and disclosure details, and are equally barred from posting fake reviews.
None of these three can avoid a complaint or grievance simply by arguing they didn't manufacture, import, or supply the product themselves (Section 20) the obligation to respond stays with whoever sold or facilitated the sale.
Import, Export, and Foreign Investment
Section 11 permits importing goods purchased from foreign e-commerce businesses, and exporting goods sold to a foreign buyer through a domestically run platform, both subject to prevailing law and banking-channel payment.
Foreign investors looking to invest in Nepali e-commerce should check the Foreign Investment and Technology Transfer Act, 2075 negative list first. It closes several categories relevant to online retail to foreign investment altogether including retail trade and internal courier services and separately caps foreign investment in ride-sharing at 40%. An e-commerce venture that shades into direct retail selling, rather than platform facilitation, may find itself outside the categories open to foreign capital.
Penalties
| Violation | Penalty |
| Operating without an electronic platform (S.4) | Fine: NPR 20,000 – 100,000 |
| Operating without listing/registration (S.5) | Fine: NPR 20,000 – 100,000 |
| Non-disclosure of product/service details (S.6) | Fine: NPR 20,000 – 100,000 |
| Breach of core duties under S.14, S.15 or S.16 | Fine: NPR 20,000 – 100,000 |
| Breach of remaining duties under S.14, S.15 or S.16 | Fine: NPR 50,000 – 500,000, or 6 months – 3 years imprisonment, or both |
A fine imposed by the inspection officer can be appealed to the Director General within seven days; the Director General's decision is final. All prosecutions run in the name of the Government of Nepal, following summary procedure.
One practical observation: the fine bands NPR 20,000 to 500,000 are modest next to the revenue of a large marketplace. For a small seller, that range is a real deterrent; for a platform processing thousands of orders a day, it risks becoming a cost of doing business unless enforcement is consistent. How actively the Department uses its inspection and grievance powers will matter more than the numbers on paper.
Grievance Redressal
Buyers can complain directly to the business's designated grievance officer, who must acknowledge and decide within 15 days (Section 33). Businesses are required to build an online grievance-redressal mechanism. Separately, anyone not just the affected buyer can file a complaint with the Director General or an inspection officer about any violation of the Act (Section 28).
What the Electronic Transactions Act Still Does
The Electronic Commerce Act doesn't operate alone. The Electronic Transactions Act, 2063 remains the foundation for:
● Legal recognition of electronic records and digital signatures (Sections 4–5) what makes an online “click to agree” or e- signed order enforceable in the first place;
● The regime for certifying authorities and digital signature certificates (Chapters 4–5);
● Computer-related offences, unauthorised access, data theft, source-code tampering, and computer fraud (Chapter 9) covering the cybersecurity end of e-commerce that the Commerce Act itself doesn't touch; and
● The Information Technology Tribunal and Appellate Tribunal, which retain jurisdiction over those offences.
An e-commerce compliance review that only checks the 2081 Act and skips the 2063 Act will miss half the picture particularly on data breaches, payment fraud, and the underlying validity of the electronic contract itself.
Practical Takeaways
1.Register your business under existing law before doing anything else, E-commerce registration is layered on top of, not instead of, ordinary business registration.
2. Build (or use a compliant third-party) platform with every Section 6 and Section 4 disclosure live before you list your first product.
3. Apply for portal listing with the Department early; the seven-day clock only starts once your application is complete.
4. Draft your terms of service to mirror Section 6 disclosures exactly, including return, refund, and warranty terms.
5. If a foreign investor is involved, check the FITTA negative list before structuring the business.
6. Keep a data-privacy protocol in place. Section 12 and the ETA's computer-offence provisions both bite on the same underlying data.
7. If you're currently selling through social-media DMs rather than a structured platform, don't assume you're outside the Act plan your registration and disclosures now, before enforcement practice hardens.
The Electronic Commerce Act, 2081 gives Nepal's online sellers a clearer rulebook, but clarity on paper isn't the same as clarity in practice. The registration and disclosure duties are unambiguous for anyone running a conventional storefront; they're considerably fuzzier for the DM-and-delivery sellers who make up a large share of the market today. Expect the next round of real clarity to come from enforcement decisions and Department directives, not from the statute itself and expect businesses that register, disclose, and build real terms of service now to be the ones least exposed when it does. This article is for general information only and does not constitute legal advice. For advice on a specific transaction or business structure, consult a licensed advocate.