On March 10, the Karnataka Assembly approved a bill requiring e-commerce platforms like Amazon, BigBasket, D-Mart, and Udaan to pay a cess to local mandis when selling agricultural staples such as rice, flour, fruits, and vegetables.
The Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill mandates that any platform facilitating the sale of regulated farm produce must contribute a cess to Agricultural Produce Market Committees (APMCs). It also extends regulations to warehouse service providers and dark stores involved in storage and distribution.
Key Provisions of the Bill
- Mandatory Cess Payment: All businesses operating via e-commerce platforms must pay a cess to APMCs.
- Increased Oversight: The Agricultural Marketing Director is now empowered to take action against cess fraud.
- Stronger Compliance Measures:
- The bill expands the definition of “trader” to include warehouse service providers.
- E-commerce platforms can operate only after obtaining a valid license.
- Misrepresentation in obtaining a license may lead to suspension.
- Only registered traders can sell on these platforms.
- Enhanced Transparency:
- All transaction records must be maintained electronically.
- Disputes regarding payments, quality, pricing, or charges must be submitted to the director within 30 days and resolved within 60 days.
- Appeals can be filed with the Karnataka Appellate Tribunal within 30 days of a decision.
Service Fee Cap & Insurance Requirement
For fruits, vegetables, and flowers, warehouse service providers can charge a maximum of 5% of the sale price, while for other agricultural products, the limit is 2%. Additionally, warehouses must provide insurance coverage against risks like fire, theft, or natural calamities.
Government’s Justification
Agricultural Marketing Minister Shivanand S. Patil emphasized that the bill strengthens compliance with APMC regulations and protects farmers from cess evasion. He noted that companies like Udaan had previously been fined ₹25 lakh for avoiding cess payments, highlighting the need for stricter enforcement.
This legislation is expected to improve transparency, prevent fraud, and ensure that farmers receive fair treatment in Karnataka’s growing e-commerce agricultural trade sector.
