Karnataka passes Bill to regulate e-commerce platforms selling agricultural produce, mandates cess payment | Bengaluru

The Karnataka Assembly on Monday passed the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill, which brings e-commerce platforms like D Mart, Big Basket, and Amazon under its regulatory framework. Once enacted, these platforms will be required to pay cess when selling agricultural products such as rice and dal.

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Presenting the bill in the Assembly, State Agricultural Marketing Minister Shivanand Patil stated that earlier regulations applied only to APMC yards, but the new law will extend to online trading platforms as well. He explained that e-commerce companies conducting business without adhering to existing legal provisions would now be held accountable. “Platforms like D Mart, Big Basket, Amazon, and Udaan have been operating outside our regulatory system. This amendment ensures they comply with cess payments and operate within the legal framework,” Patil told the House.

The bill also introduces new provisions, including the regulation of warehouse service providers. Previously, the law only referred to ‘traders,’ but now, warehouse service providers are explicitly defined, along with their responsibilities. The APMC Director will oversee their operations, and an appellate authority will handle disputes. Patil noted that Udaan recently paid a fine of ₹25 lakh for evading cess, highlighting the need for stricter enforcement.

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Under the amendment, an ‘e-commerce platform’ is defined as an online medium that allows licensed traders to sell agricultural produce directly to licensed retail traders within a specified market area. These sales must be for consumer use only and not for resale or processing. Farmers will also be able to make payments through electronic payment methods, ensuring smoother transactions.

The bill further clarifies the role of warehouse service providers, who will now charge a service fee only to the buyer. The charges are capped at 5% of the sale price for fruits, vegetables, and flowers and 2% for other notified produce. Warehouse operators must ensure safe storage of goods, provide insurance coverage against risks such as fire, theft, or natural disasters, and offer essential facilities like fire-fighting equipment, electronic weighing systems, e-trading services, and quality certification. Additionally, they will be responsible for displaying commodity prices in markets and facilitating pledge loan arrangements.

(With agency inputs)