Main features of IT act 2000

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Main features of IT act 2000/2006 amendment and its role in the growth of E-business in India:

Main features of IT act 2000/2006 amendment and its role in the growth of E-business in India By : Nihar Sharma Shalini Gupta Sameer Manwani

Information Technology act 2000:

Information Technology act 2000 Following the UN Resolution(United Nations Commission on International Trade Law Resolution A/RES/51/162, dated 30 January 1997 ) India passed the Information Technology Act 2000 in May 2000 and notified it for effectiveness on October 17, 2000. Information technology Act 2000 consisted of 94 sections segregated into 13 chapters. Four schedules form part of the Act. Information Technology Act 2000 addressed the following issues: 1.Legal Recognition of Electronic Documents . 2.Legal Recognition of Digital Signatures . 3.Offenses and Contraventions . 4. Justice Dispensation Systems for Cyber crimes . It seeks to create the Public Key Infrastructure (PKI) for electronic authentication through digital signatures, on the other hand, it seeks to build confidence among the public that the frauds in the cyber space will not go unpunished.

Continued…….:

Continued……. Act aims to provide for the legal framework so that legal sanctity is accorded to all electronic records and other activities carried out by electronic means . The Controller of Certifying Authorities (CCA) has been put in place for effective implementation of the IT Act . The said Act further states that unless otherwise agreed, an acceptance of contract may be expressed by electronic means of communication and the same shall have legal validity and enforceability . The Act comprises the need for recognising foreign Certifying Authorities and it further details the various provisions for the issue of license to issue Digital Signature Certificates. Act also provides for the constitution of the Cyber Regulations Advisory Committee which shall advice the government as regards any rules or for any other purpose connected with the said act. The said Act also has four Schedules which amend the Indian Penal Code, 1860, the Indian Evidence Act, 1872, The Bankers' Books Evidence Act, 1891, The Reserve Bank of India Act, 1934 to make them in tune with the provisions of the IT Act.

Criticisms of the Act:

Criticisms of the Act It is argued that legal enforceability of electronic contracts is open to challenge and legal jurisdiction of contracts involving international parties is not defined. The Act is also silent on issues regarding taxation of electronic transactions. Customs duty for cross border taxation, sales tax, etc. (indirect taxation) for goods and services delivered electronically are not clearly spelled out Cyber crimes which are not fully covered are an area of concern for the growth of e-commerce. In this context it is also argued that Law enforcement Agencies are not fully equipped and trained to deal in cyber crimes IT Act is silent on the issue of protection of intellectual rights (patents, trademarks, copyrights) including domain names. The Act seeks to bureaucratize the entire process of controlling electronic commerce. This is likely to result into consequences of delays and other related problems.

Information Technology Amendment Act 2006 :

Information Technology Amendment Act 2006 Legal recognition for e-commerce and e-transactions, to facilitate e-governance, to prevent computer based crimes . Protection of Critical Information Infrastructure is pivotal to national security, necessary to declare such infrastructure as a protected system so as to restrict its access. Penal provisions are required to be included in the Information Technology Act, the Indian Penal Code, the Indian Evidence Act and the Code of Criminal Procedure to prevent such crimes (video voyeurism and breach of confidentiality and leakage of data by intermediary, e-commerce frauds like personation commonly known as Phishing, identity theft and offensive messages through communication services ) Since the digital signatures are linked to a specific technology under the existing provisions of the Information  Technology Act, it has become necessary to provide for alternate technology of electronic signatures for bringing harmonisation with the said Model Law .

Impact of IT act 2000 on E business/E commerce :

Impact of IT act 2000 on E business/E commerce Pro-2000 scenario

Growth in E commerce sector :

Growth in E commerce sector Year Business to customer transactions (in crore rupees) 1998-1999 12 1999-2000 50 2000-2001 100

Problems of that period:

Problems of that period Limited internet access among consumers . Poor telecom services and infrastructure for reliable connectivity. Multiple gaps in legal and regulatory framework. Multiple issues of trust and lack of payment gateways. Companies enabled to carry out ecommerce through the legal framework provisioned by the act. The Act also gives a legal definition to the concept of secure digital signatures which would be required to have been passed through a system of a security procedure, as stipulated by the government The IT Act has defined various cyber crimes and has declared them penal offences punishable with imprisonment and fine. The Act also enables the companies to file any form, application or any other document with any office, authority, body or agency owned or controlled by the appropriate Government in the electronic form by means of such electronic form as may be prescribed by the appropriate Government Remedial steps through IT act

Second period 2002-2008:

Second period 2002-2008

E commerce market size:

E commerce market size Internet’s democratic nature incompatible with authoritarian political structures. Ban on certain websites under authoritarian regime. Government’s concern on outflow of foreign currency. Intellectual property protection. Product delivery means and infrastructure year B2C transactions(crore Rs) % growth 2002-03 130 - 2003-04 255 96 2004-05 570 124 2005-06 1180 107 2007-08 2300 95 Political/Legal/infrastru-ctural issues

Recent time 2008-11:

Recent time 2008-11

E Commerce market size:

E Commerce market size Increasing broadband Internet (growing at a 20% rate) and 3G penetration. Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes. Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers . India has close to 10 million online shoppers and is growing at an estimated 30% Year B2C e commerce sales( billion $) 2008 1.9 2009 2.8 2010 4.1 2011 5.6 Reasons for growth

Conclusion:

Conclusion Indian eCommerce space percentage is getting higher as more and more online retailers enter the market. The role of government is to provide a legal framework for E Commerce so that while domestic and international trade are allowed to expand their horizons, basic rights such as privacy, intellectual property, prevention of fraud, consumer protection etc are all taken care of. All said and done, The Information Technology Act,2000 is a great achievement and a remarkable step ahead in the right direction. The IT Act is a first step taken by the Government of India towards promoting the growth of electronic commerce so that Electronic Commerce in India can leap frog to success. Despite all its failings, it is a first historical step. The other steps have to follow.

References:

References Sinha (April 2009), “ Ecommerce in India – The Real Challenges”. Bajaj, K.K., Country Report on E-Commerce (India, Ministry of Communications and Information Technology, Department of Information Technology, Office of the Controller of Certifying Authorities). http://Information Technology Act 2000 of India with Amendments by ITAA 2006.htm. ‘E-commerce and the law: a  review of India’s Information Technology Act, 2000’ by Subhajit Basu and Richard Jones, Contemporary South Asia, 12(1), pp7-24, March 2003