Karnataka passes bill to regulate e-commerce platforms like Amazon, BigBasket

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The Karnataka assembly on March 10 approved a bill regulating e-commerce platforms such as Amazon, BigBasket, D-Mart and Udaan, asking them to pay a cess to local mandis when they sell staples such as rice, flour, fruits and vegetables.

The Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill mandates that any e-commerce platform facilitating the sale of notified agricultural produce must pay a cess to Agricultural Produce Market Committees (APMCs). The bill also covers “warehouse service providers” or those offering dark stores.

“Once the bill becomes law, all businesses operating on e-commerce platforms must comply with its provisions. This amendment will ensure transparency and prevent APMCs and farmers from being cheated,” agricultural marketing minister Shivanand S Patil said

The Agricultural Marketing Director has now been empowered to take action in cases of cess fraud.

“Many e-commerce platforms evaded the cess in the past. For instance, previous law mentioned only “trader” but now includes ‘warehouse service providers.’ Udaan, for example was recently fined Rs 25 lakh for evading the cess. This amendment will prevent e-commerce platforms from evading the cess,” Patil said.

The bill says that e-commerce platforms involved in trading notified agricultural produce such as rice, wheat, fruits, vegetables and flowers can operate only after obtaining a licence. If a licence is obtained through misrepresentation or fraud, the director of agricultural markets has the authority to suspend it.

The director may also grant licences to establish an e-commerce platform, subject to prescribed conditions, fees, and security deposits. Only traders licenced by the authority will be permitted to register on an e-platform.

The bill mandates transparency in business operations, requiring all transaction records to be maintained electronically. Any disputes related to payment, weight, quality, price, or charges must be submitted to the director of agricultural markets within 30 days along with necessary documentation.

The director has to resolve disputes within 60 days after providing an opportunity for objections. If the decision is disputed, an appeal can be filed with the Karnataka Appellate Tribunal within 30 days of receiving the order.

For fruits, vegetables and flowers, warehouse service providers can charge a maximum of 5 percent of the sale price as the service fee, for all other notified agricultural products, it is capped at 2 percent. Warehouse owners must also ensure insurance coverage against fire, theft, rain, or other natural calamities as per the Act.

“The passage of this bill marks a significant step toward regulating e-commerce platforms involved in agricultural trade which ensures compliance with APMC regulations, and protects farmers from cess fraud,” Patil said.