Is Google Liable To Pay Taxes In India?

Is Google Liable To Pay Taxes In IndiaGoogle is all set to challenge the Indian laws and various provisions under them that are making it answerable to Indian courts and liable under various legal frameworks. The online defamation case of Google is already pending before the Supreme Court of India. Similarly, various cases filed against Google under the Information Technology Act, 2000 (IT Act 2000) are also pending in various Courts.

Google has a single defence against all these alleged civil and criminal violations. It has been maintaining that all the accusations and liability can be imputed to the parent company that is situated in United States (US.). Since Google’s parent company is subjected to U.S. laws, it is neither amendable nor answerable to various Indian laws and their compliances.

This stand is occasionally taken before various Courts in India whether it is a civil or criminal case. Google’s subsidiary argument is too week to stand any trial yet Google has been winning from time to time. Google is also winning despite the fact that there are clear cut violations of Indian laws like IT Act, 2000. Google is an Internet intermediary within the meaning of IT Act, 2000 and it is also required to comply with cyber law due diligence requirements (PDF) for having strong virtual and physical contacts in India. Even advertisement revenue is also earned by Google from Indian activities.

In these circumstances claiming that Google is not liable under Indian laws is not legally tenable. It is high time for Indian courts to remove the façade of subsidiary and make the parent company liable under Indian laws. Websites like Facebook and Google are liable to pay taxes under Indian laws as they generate huge revenue through agreements with Indian advertisers as well as sale of games and applications to internet users here.

Google India has contended in its affidavit that it “is not providing any taxable services in India, neither has a permanent establishment in India nor is it earning any income which is arising from or accruing in or deemed to be arising or accruing from India. “Furthermore, Google is not receiving any payment in the nature of ‘royalty’ which may be taxable either under the relevant Indian laws or under the Double taxation Avoidance Agreement between India and USA.”

We at Perry4Law believe that all Subsidiary/Joint Ventures Companies in India, especially those dealing in Information Technology and Online Environment, must mandatorily establish a server in India. Otherwise, such Companies and their Websites should not be allowed to operate in India. The Ministry of Home Affairs, India and Intelligence Bureau (IB) are already exploring this possibility.

A “Stringent Liability” for Indian Subsidiaries dealing in Information Technology and Online Environment must be established by Laws of India. More stringent online advertisement and e-commerce provisions must be formulated for Indian Subsidiary Companies and their Websites.

M-Health Laws And Regulations In India Needed

M-Health Laws And Regulations In India NeededUse of information and communication technology (ICT) is increasingly being used to deliver health related services around the world. In the Indian context, health related services are not readily available. In remote areas and villages, patients have to travel all the way to big cities to get themselves treated. Some of these illnesses are of simple nature and they can be suitably treated with a simple consultation with the doctor. Such consultation can take place through the use of video conferencing and other technology instruments like mobiles.

This use of mobile devices to deliver health related services is popularly known as m-health. In India, m-health is still in infancy stage. The technological and legal issues of m-health are still evolving. As a result, most of the m-health service providers are not complying with either technological or legal requirements applicable in India. Cloud computing and virtualisation have introduced their own techno legal challenges to m-health related services.

In India, e-health related legal framework is missing. For instance, e-health in India is facing legal roadblocks. Till now we do not have any dedicated e-health laws and regulations in India. The legal enablement of e-health in India is urgently required. Naturally, dedicated m-health laws and regulations in India are also missing and different laws apply to m-health related issues in India. Telemedicine and online pharmacies laws in India and their legal implications and liabilities are also unknown to various m-health professionals.

The privacy rights in India in the information age have also posed many legal challenges before m-health companies and entrepreneurs in India. Although we have no dedicated  privacy laws in India and data protection laws in India (PDF) yet there  are certain legislations in India that govern both privacy and data protection aspects of m-health industry in India.

The cyber litigations against foreign websites would increase in India. M-health entrepreneurs must also keep in mind the requirements of Internet intermediary liability in India and cyber law due diligence in India (PDF). The new Indian Companies Act, 2013 (PDF) would further raise the incidences of corporate criminal liability in India.

When technology is used for medical purposes, it gives rise to medico legal and techno legal issues. In United States, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine. India also needs laws like HIPPA and other similar laws that can regulate m-health related issues in India.

Virtualisation, Cloud Computing Solutions And Encryption Usage In India: Legal Compliances Issues

Virtualisation, Cloud Computing Solutions And Encryption Usage In India Legal Compliances IssuesMany entrepreneurs have shown great interest in cloud computing and virtualisation services in India. However, a dedicated cloud computing legal framework is missing in India and it is governed by provisions scattered under numerous legislations. Another related problem that both cloud computing and virtualisation businesses must tackle pertains to respecting privacy rights in India in the information age. The dedicated privacy laws in India and data protection laws in India (PDF) are also missing. This has complicated the cloud computing and virtualisation business scenario in India.

Virtualisation, cloud solutions and encryption are three issues that are interrelated. These aspects are interrelated through various applicable laws in India that all virtualisation and cloud computing companies must follow to avoid legal liabilities. Cloud computing and virtualisation service providers in India are required to comply with Internet Intermediary liability prescribed under the Information Technology Act, 2000.

The present trend in India in this regard is not very encouraging. Virtualisation and cloud computing service providers are either not aware of applicable Indian laws or they are working in gross regard of the same. Even requirements of Indian laws pertaining to encryption usage in India are not followed in proper manner.

Virtualisation and cloud computing service providers in India must not only follow the encryption laws of India but they must also ensure cyber law due diligence in India (PDF). This is more so when the cyber law due diligence for companies in India has become very stringent and foreign companies and websites are frequently prosecuted in India for non exercise of cyber due diligence. The cyber litigations against foreign websites would increase in India. The Google’s Online Defamation Case is the contemporary example n this regard.

Perry4Law and Perry4Law Techno Legal Base (PTLB) have provided the Cyber Law Trends and Developments of India 2013 (PDF), Cyber Security Trends and Developments in India 2013 (PDF) and Cyber Forensics Trends and Developments in India 2013 (PDF). According to these trends cyber due diligence for cloud computing, social media, virtualisation services, etc would be required to be exercised frequently in India by various technology players.

Further, although we have no dedicated legal framework for cloud computing in India as on date yet legal and regulatory issues of cloud computing in India would arise in future. In fact, cloud computing in India is legally risky. Further, e-discovery for cloud computing in India would also bring its own share of techno legal issues. Companies dealing in virtualisation and cloud computing services must ensure that they are complying with various techno legal requirements in India.

BitInstant’s CEO Charlie Shrem Charged With Money Laundering Activities In United States

BitInstant’s CEO Charlie Shrem Charged With Money Laundering Activities In United StatesBitcoins recently witnessed an interest and craze of mass scale. Individuals and companies around the world started exploring Bitcoins as a potential and remunerative investment without considering its volatility and possible legal challenges. Naturally, governments around the world started targeting Bitcoins and their dealings in an illegal manner. Some countries totally banned Bitcoins whereas other shave issued warnings and precautions against their uses.

Meanwhile, businesses tried to make Bitcoins a part of their dealings. For instance, hotels, casinos, online gaming websites, salons, restaurants, etc have started accepting Bitcoins as a mode of payment for their services. However, this is a risky proposition and it may also bring civil and criminal charges against those accepting and giving Bitcoins. This is because the legality of Bitcoins is still not clear in many jurisdictions.  Even the Bitcoin exchanges and Bitcoins websites operating in India must comply with Indian laws to be legal.

It has been reported by Washington Post that Charlie Shrem, the CEO of Bitcoin exchange BitInstant, has been charged with money laundering. A press statement (PDF) from U.S. prosecutors in Manhattan said that Shrem knowingly facilitated illegal purchases on the now-shuttered underground drug marketplace Silk Road. According to the government, a man named Robert Faiella worked with Shrem to sell Bitcoins to Silk Road users. The two men allegedly sold more than $1 million worth, with Shrem giving Faiella a volume discount on BitInstant’s fees.

“Upon receiving orders for Bitcoins from Silk Road users,” the government said, Faiella filled the orders through BitInstant, which “was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service.” According to the government, that runs afoul of U.S. money laundering laws, which require payment companies like BitInstant to collect information about their customers, monitor their transactions, and report “suspicious” transactions to the government. Shrem failed to do this, the government says. Faiella is also facing charges.

In India, the RBI cautioned users of virtual currencies against various risks. These include legal risks as well. Meanwhile, the Enforcement Directorate (ED) searched two Bitcoins websites and their offices. ED believes that Bitcoins can be used for Hawala transactions and funding terror operations. In the present non compliance environment and increasing Bitcoins frauds and crimes, more such searches and arrests are anticipated in India and other parts of the world.

Intelligence Bureau (IB) Expediting The Testing Of VOIP Interception System In India

Intelligence Bureau (IB) Expediting The Testing Of VOIP Interception System In IndiaE-surveillance and eavesdropping has tremendously increased in India. the Indian government is bringing systematic changes in the telecom policies and licences to enforce these e-surveillance oriented exercises. Even the Information Technology Act, 2000 was amended in the year 2008 to confer unlimited e-surveillance powers upon Indian government and its agencies. So bad is the situation that there have been suggestions regarding repealing of the Indian cyber law and Indian telegraph law.

Nevertheless till these unconstitutional laws are repealed, they would still govern the commercial relationships between telecom companies and Indian government. Recently, the Indian government introduced fresh set of do’s and don’ts for telecom companies for lawful interception bringing internet telephony VoIP, SMS and MMS under Indian Telegraph Act. Further, the IT Act, 2000 prescribes many cyber laws due diligence requirements (PDF) that Indian telecom companies are not at all following. For instance, the reports of violations of cyber law due diligence and Internet intermediary rules by Tata Teleservices Limited and Airtel are well known.

Now the Ministry of Home Affairs, India has decided to tighten the noose further. The ET has reported that Home Secretary Anil Goswami has sought Telecom Secretary MF Farooqui’s intervention to expedite clearance for the Intelligence Bureau (IB) to test an interception solution to monitor voice over internet protocol (VoIP) calls in India. If the trial is successful, it will be possible to screen VoIP services offered by the likes of Skype, Yahoo Messenger, GTalk, Fring and RediffBol, among others in India. This is in addition to the legal requirement that Internet telephony and VOIP service providers must establish servers in India now.

The IB plans to test the VoIP interception solution on Bharat Sanchar Nigam Ltd’s networks in consultation with the department of electronics and IT. “A team of DeiTY and Intelligence Bureau officers may be permitted access to BSNL’s networks to test a lawful interception solution on VoIP traffic,” Goswami wrote to Farooqui.

The home secretary’s letter also added that the IB would be the law enforcement agency under Section 5(2) of the Indian Telegraph Act, 1885, which “would be maintaining a full record of VoIP traffic intercepted on test basis and retain only transcripts required in the interest of national security”.

Apart from the IB, the home ministry also plans to instruct India’s Computer Emergency Response (Cert-IN) team to maintain a full record of the VoIP interception trails on BSNL’s network. Cert-IN has been mandated by the government to respond to computer security incidents, track system vulnerabilities and promote effective IT security practices.

The home ministry had recently urged the telecom department to block all VoIP services that cannot be monitored or intercepted in audible or viewable format by national law enforcement agencies. It had even suggested that the DoT tweak the licence norms to make it binding on service providers to allow interception of VoIP traffic. Learning from the interception pilot will be used by the government to fine tune the Centralised Monitoring System (CMS), the much-awaited national surveillance system that will equipped to track all forms of communications, including wireless, landline, satellite, internet and VoIP calls from next year. Further, the Internet Spy System Network and Traffic Analysis System (NETRA) of India, Aadhar, National Intelligence Grid (NATGRID), etc would also support intelligence agencies e-surveillance initiatives in India.

The life of telecom companies and companies engaged in telecom related business is going to be a tough one in the near future. They have to comply with the techno legal requirements where both technical and legal issues would be required to be complied with in true letter and spirit.

Indian Cyber Law And Telegraph Act Should Be Immediately Repealed And Reenacted By Parliament

PRAVEEN-DALAL-MANAGING-PARTNER-OF-PERRY4LAW-CEO-PTLB1What exactly is the role of Parliament? The most common answer would be to enact Laws from time to time. However, Parliament also has a role to not only weed out outdated Laws but also to repeal and reenact “Constitutionally Sound Laws”. If Parliament allows Outdated and Unconstitutional Laws to continue that would create Chaos and Anarchy and question the very concept of “Separation of Power in India”.

In the Indian context, we have thousands of Laws that were enacted during the British rule. Now they have well served their purpose and they should not be part of Indian Laws. However, they are still alive on the Indian Statute books only to be declared Unconstitutional in many decades of legal proceedings.

Surprisingly, Indian Parliament is not at all interested in passing “Dedicated and Constitutional Laws” in the fields of Privacy, Data Protection (PDF), Unique Identification Cards (Aadhaar), Central Monitoring System (CMS), Telephone Tapping And Surveillance Laws in India, Cyber Security, Cyber Forensics, E-Discovery, E-Governance, E-commerce, etc.

Instead, Parliament has “Abdicated its Duties” and has allowed the Indian Executive to take its role through issuing various “Executive Orders”. For instance, Authorities like Unique Identification Authority of India (UIDAI), National Intelligence Grid (NATGRID), etc are functioning in an “Unconstitutional Manner” simply on the basis of Executive Orders. What is worst is that the Indian Government has been “Luxuriously Spending” the hard earned “Public Money” on these “Unconstitutional Authorities and Projects”.

One such Outdated and Unconstitutional Law that deserves “Immediate Repeal” is the Information Technology Act, 2000.  Another similar Law is the Indian Telegraph Act, 1885 that is the “Biggest Hurdle” for “Judicial Review” of Illegal and Unconstitutional Phone Tapping Directions in India. Collectively Laws like the IT Act, 2000 and Indian Telegraph Act, 1885 and Projects and Authorities like UIDAI, NATGRID, Central Monitoring System (CMS), etc are openly violating the Civil Liberties Protection in Indian Cyberspace.

It is a good time for Indian Parliament to interfere and start functioning as per the “Constitutional Obligations” under the Constitution of India. Why we always need a Tragedy or Street Dharna to push Indian Parliament to pass Crucial Laws in India. Recently, the Lokpal and Lokayuktas Act, 2011 tested the Legitimacy of Indian Parliament. The Indian Parliament was “Force” to pass the Jan Lokpal Law due to present “Political Conditions” and Street Dharnas. This is really unfortunate that our Parliament works only “Under Pressure” and “Civil Disobedience Movements”. At least for a single time, the Parliament of India must act timely and “Repeal and Reenact” the IT Act, 2000 and Indian Telegraph Act.

Indian Banking Regulatory Environment Is Changing But Much Still Has To Be Achieved

Indian Banking Regulatory Environment Is Changing But Much Still Has To Be AchievedReserve Bank of India (RBI) is under great stress these days. Besides managing its own banking objectives and responsibilities, RBI has to analyse and tackle the growing challenges posed by technology to the banking segment of India.

Whether it is ATM frauds, Internet banking frauds, credit card frauds, RTGS frauds or any similar fraud, banks in India are exposed to numerous forms of technical and cyber security vulnerabilities.

Banks are passing the buck to the end customer and the end customer is at loss even if he is an innocent victim. This is the reason why the Code Of Bank’s Commitment to Customers by Banking Codes and Standards Board of India (BCSBI) has been formulated.

Some of the significant developments that have recently taken place in the banking sector of India and that intend to bring banking reforms in India are:

(1) Guidelines on Implementation of Basel III Capital Regulations in India (PDF)

(2) Report of the Working Group of Reserve Bank of India (RBI) on Securing Card Present Transaction (PDF)

(3) Guidelines on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds by Reserve Bank of India (RBI) (PDF)

(4) Report of Reserve Bank of India (RBI) Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds (PDF)

(5) Code of Bank’s Commitment to Customers by Banking Codes and Standards Board of India (BCSBI) (PDF).

However, the RBI has still not been able to manage the technological issues that keep on surfacing day by day. For instance, RBI has failed to regulate the free and unregulated use of Bitcoins in India. Despite the pressing requirements, RBI has maintained a silence on this crucial aspect. This is giving a negative impression about RBI and Bitcoin exchanges are openly dealing in Bitcoin without actually complying with Indian laws.

Further, the banks in India have also failed to comply with the Internet intermediaries requirements the cyber law due diligence requirements (PDF). Banks in India have also failed to comply with various directions and guidelines issued by RBI vis-à-vis cyber security requirements from time to time.

Privacy And Data Protection Aspects In Indian Cyberspace

PRAVEEN-DALAL-MANAGING-PARTNER-OF-PERRY4LAW-CEO-PTLB1Privacy Protection requirements are important for both Individuals and Organisations alike. There have been many attempts in India to formulate a dedicated Privacy Protection Law in India but all of them have failed so far. Thus, Data Protection Laws in India and Privacy Rights in India are still deriving their legal recognition from scattered provisions under different Indian Legislations.

One area where the Privacy and Data Protection are absolutely missing in India pertains to Cyberspace. Privacy Rights in India in the Information Age are absolutely missing in India. On the contrary there are “Fully Functional E-Surveillance Projects” that are “Actively Violating Privacy Rights” of Indian citizens.

For instance, India has launched Projects like Aadhar, National Intelligence Grid (NATGRID), Crime and Criminal Tracking Network and Systems (CCTNS), National Counter Terrorism Centre (NCTC), Central Monitoring System (CMS), Centre for Communication Security Research and Monitoring (CCSRM), Internet Spy System Network And Traffic Analysis System (NETRA) of India, etc. None of them are governed by any Legal Framework and none of them are under Parliamentary Scrutiny.

This position is not only in active violation of protections conferred under the Constitution of India but they are also violative of the recent United Nations (UN) Draft Resolution on the Right to Privacy in the Digital Age. Of course, a provision has been suggested in the proposed Privacy Law of India that Illegal Phone Tapping in India may attract Rs 2 Crore Penalty.

However, the same is just a proposal as till the Privacy Law is actually brought into force, everything remains on the “Governmental Dreamland”.  Further, the proposed Privacy Law of India is already facing Obstacles laid by the Intelligence Agencies of India. The study titled Lawful Interception- A Mounting Challenge for Service Providers and Government (PDF) provided by Frost and Sullivan has shown that Governments around the world are indulging in Unregulated and Unconstitutional E-Surveillance and Eavesdropping activities.

The status of poor Privacy and Data Protection Legal Environment in India has also been reflected in the Cyber Law Trends and Developments of India 2013 (PDF), Cyber Security Trends and Developments in India 2013 (PDF) and Cyber Forensics Trends and Developments in India 2013 (PDF) provided by Perry4Law and Perry4Law’s Techno Legal Base (PTLB).

India must not only enact dedicated Privacy and Data Protection Laws but it must also formulate E-Surveillance Policy of India and Indian Encryption Policy. As on date the Privacy and Data Protection Aspects in Indian Cyberspace are in really bad shape.

Data Protection Laws In India And Privacy Rights In India

Data Protection Laws In India And Privacy Rights In IndiaData protection and privacy rights are two of the most important rights conferred by any civilized nation. Every individual and organisation has a right to protect and preserve her/its personal, sensitive and commercial data and information. This is more so regarding health information and details that is required to be kept secret by laws like Health Insurance Portability And Accountability Act Of 1996 (PDF) (HIPAA) in United States.

India does not have a dedicated law like HIPPA and presently HIPPA compliances in India are not followed. Similarly, we have no dedicated medical privacy law in India that can safeguard the sensitive health related information of the patients. In short, we have no dedicated data protection laws in India, data privacy laws in India and privacy rights and laws in India.

Of course, we have general laws and some of the provisions of these laws can be applied to data security, data protection and privacy protection in India. However, that is a temporary solution and in the long run we need dedicated privacy rights, privacy laws and data protection laws in India.

Further, in this information technology era a special attention must be paid to the privacy rights in India in the information age. We believe that data protection requirements are essential part of civil liberties protection in cyberspace. With the growing use of information and communication technology (ICT), data protection requirement has become very important. It would not be wrong to assume privacy and data protection rights as integral part of human rights protection in cyberspace.

However, despite the importance of these fields, till now we lack legal frameworks in the fields of data security, data protection and privacy protection. We urgently need to formulate data protection law in India and privacy laws in India.

At the policy level as well privacy rights and data protection rights have been ignored in India. In fact, an Indian national privacy policy is missing till now. Even legislative efforts in this regard are not adequate in India. A national privacy policy of India is urgently required.

A right to privacy bill of India 2011 has been suggested in the year 2011 yet till January 2014 we do not have any conclusive draft in this regard that can be introduced in the Parliament of India. In fact, we are still waiting for a public disclosure of final and conclusive proposed draft right to privacy bill 2011 of India that can be discussed in the Parliament.

The ball is again in the court of judiciary and it has to play a pro active role once again. The Supreme Court of India must expand privacy rights in India as that is the need of hour. Fortunately, the issue is already pending before it and there would not be much trouble in formulating a privacy framework for India.

However, in the ultimate analysis, it is the constitutional duty of Indian Parliament to do the needful in this direction. Indian Parliament must enact sound and effective privacy and data protection laws for India as soon as possible.

Let us hope that the Data Protection Laws in India and Privacy Rights in India (PDF) would be drafted by Indian Parliament very soon.

RBI Cautions Users Of Virtual Currencies Against Risks

RBI Cautions Users Of Virtual Currencies Against RisksThe legality of Bitcoins in India is an area that has been vexing many stakeholders. The Reserve Bank of India (RBI) was contemplating to issue a public advisory to warn against potential risks of Bitcoins in India. As per the press release, RBI cautioned users of virtual currencies against risks of use of Bitcoins in India. The advisory of RBI is in conformity with the views expressed by Perry4Law so far.

RBI has today cautioned the users, holders and traders of Virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to.

In its cautionary advice, the Reserve Bank has been mentioned that it has been looking at the developments relating to certain electronic records claimed to be “Decentralised Digital Currency” or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., their usage or trading in the country and the various media reports in this regard.

The creation, trading or usage of VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities. As such, they may pose several risks to their users, including the following:

(1) VCs being in digital form are stored in digital/electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc. Since they are not created by or traded through any authorised central registry or agency, the loss of the e-wallet could result in the permanent loss of the VCs held in them.

(2) Payments by VCs, such as, Bitcoins take place on a peer-to-peer basis without an authorised central agency which regulates such payments. As such, there is no established framework for recourse to customer problems / disputes / charge backs etc.

(3) There is no underlying or backing of any asset for VCs. As such, their value seems to be a matter of speculation. Huge volatility in the value of VCs has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value.

(4) It is reported that VCs, such as, Bitcoins are being traded on exchange platforms set up in various jurisdictions whose legal status is also unclear. Hence, the traders of VCs on such platforms are exposed to legal as well as financial risks.

(5) There have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws.

The Reserve Bank has also stated that it is presently examining the issues associated with the usage, holding and trading of VCs under the extant legal and regulatory framework of the country, including Foreign Exchange and Payment Systems laws and regulations.

Norway Says Bitcoins Does Not Qualify As Real Money

Norway Says Bitcoins Does Not Qualify As Real MoneBitcoins and its legality are still evolving. However, the mood of majority of countries and regulatory authorities around the world is to restrict the open and unregulated use of Bitcoins.

For instance, Thailand has already banned Bitcoins. The People’s Bank of China (PBC) has warned financial institutions that they should be “on guard” against the use of Bitcoins because of risks of fraud and money laundering. The France’s central bank has warned against the use of the virtual currency Bitcoin, noting that it is not only highly volatile but also unregulated by authorities. Even India is planning to issue a public advisory against use of Bitcoins in India.

Now Bloomberg has reported that the government of Norway said the virtual currency doesn’t qualify as real money.  “Bitcoins don’t fall under the usual definition of money or currency,” Hans Christian Holte, director general of taxation in Norway, said in an interview. “We’ve done some assessments on what’s the right and sound way to handle this in the tax system.”  Norway will instead treat Bitcoins as an asset and charge a capital gains tax, after Germany in August said it will impose a levy on the virtual currency.

The European Banking Authority (EBA) has also released a warning on the risks of using unregulated digital money that is susceptible to hackers. “Cases have been reported of consumers losing significant amounts of virtual currency with little prospect of having it returned,” the EBA said in a statement on its website. “When using virtual currency for commercial transactions, consumers are not protected by any refund rights under EU law.”

Public Advisory To Warn Against Potential Risks Of Bitcoins In India To Be Issued By Indian Government Soon

Public Advisory To Warn Against Potential Risks Of Bitcoins In India To Be Issued By Indian Government SoonIndia lacks insight and ingenuity when it comes to dealing with novel problems. It always tries to adopt other’s plans and efforts to solve its problems. This is many cases bring absurd results. The latest in this series was the issue pertaining to legality of Bitcoins in India. India waited for other nations to take the lead and take a stand before it can regulate or govern Bitcoins in India.

Meanwhile, China, France, Thailand, etc have either regulated the use of Bitcoins or they have completely banned them in their jurisdictions. But the Reserve Bank of India (RBI) and Indian government kept on sleeping over the issue. Meanwhile, Bitcoins frauds and crimes are increasing world over, including in India.

The Indian approach towards Bitcoins is not at all conducive for national interest and Indian government must urgently regulate Bitcoins in India as soon as possible. Perry4Law and Perry4Law’s Techno Legal Base (PTLB) have been stressing upon the need to regulate Bitcoins in India for long.

Now media reports have confirmed that Indian authorities may soon issue a public advisory to warn against potential risks associated with this new digital currency concept. We at Perry4Law and PTLB welcome this move of Indian government.

International Regulatory Framework For Internet Governance And Indian Perspective And Approach

International Regulatory Framework For Internet Governance And Indian Perspective And ApproachInternet governance is a complicated international issue that required international support and coordination to resolve. While United States has an inherent interest in retaining as much control over Internet as possible yet international community is more eager to make the Internet decentralised and internationally regulated.

According to Wikipedia, Internet governance is the development and application of shared principles, norms, rules, decision-making procedures, and programs that shape the evolution and use of the Internet.

The recent e-surveillance exercises of National Security Agency (NSA) of United States have shaken the faith and trust of world community at large. James Clapper has also admitted that NSA is targeting foreign citizens for surveillance.

Reacting sharply, the United Nations (UN) Third Committee approved text titled Right to Privacy in the Digital Age. United Nations (UN) has approved the United Nations (UN) Draft Resolution on the Right to Privacy in the Digital Age- Final Version (PDF). It is different from the Original United Nations (UN) Draft Resolution on the Right to Privacy in the Digital Age (PDF). This has happened as United States objected to the original Resolution and UN removed the relationship between Human Rights Violations in Cyberspace and e-surveillance exercises by various nations. This change of language breaks the link between extraterritorial surveillance and human rights violations.

Nevertheless countries are not comfortable with the control of United States over the Internet through root servers and domain name infrastructure. The Hindu has reported in view of its growing cyber security concerns, India has decided to challenge the U.S. government’s control over the Internet and ensure that the trio of the U.S., Russia and China does not ignore India’s concerns while developing an international regime for Internet governance.  India will also push for storing all Internet data within the country, besides ensuring control and management of servers.

India has also been stressing that Internet telephony and VOIP service providers must establish servers in India. Besides issues like e-surveillance and conflict of laws have also forced India to exert more control over its cyberspace. However, India must ensure techno legal measures to regulate Indian cyberspace. Further, domain name protection in India must be free from ICANN’s influence as ICANN is not helping in enforcement of Indian laws at all.

“The control of Internet was in the hands of the U.S. government and the key levers relating to its management was dominated by its security agencies…Mere location of root servers in India would not serve any purpose unless we were also allowed a role in their control and management. We should insist that data of all domain names originating from India…should be stored in India. Similarly, all traffic originating/landing in India should be stored in India,” says an internal note prepared after the meeting of Sub-Committee on International Cooperation on Cyber Security under the National Security Council Secretariat (NSCS). Notably, the key function of domain name system (DNS) management today is in the hands of the U.S. National Telecommunication and Information Administration and the Department of Commerce. Though after persistently putting pressure on companies, India managed to get root servers installed in the country, it wants a say in management of these servers. India is also seeking a key role in policy making on Internet governance at the international level, said a senior government official engaged in India’s cyber security preparedness.

“It was important that management and control of the DNS should be supervised by a ‘Board’ consisting of technical experts nominated by governments and India should be represented on this Board. We should seek a larger determinate role for the GAC [Government Advisory Committee] in ICANN [Internet Corporation for Assigned Names and Number] a U.S.-based non-profit organisation that coordinates global Internet systems, which we should be effectively represented,” the note adds.

Significantly, under the ‘Affirmation of Commitments’ between the ICANN and the U.S. Department of Commerce, the ICANN committed that it would not shift outside of the U.S. without the concurrence of the U.S. government and the process of Internet management would be led by private sector. At the meeting, held last month and headed by Deputy National Security Advisor and NSCS Secretary Nehchal Sandhu, it was decided that the Ministry of External Affairs along with the Department of Electronic and Information Technology (DEITy) and the NSCS, will develop a position paper, highlighting India’s concerns regarding representation and management control in the Internet governance domain.

India is also concerned about the proximity of the U.S., Russia and China while deciding on issue of Internet governance. “There was a possibility that the U.S., Russia and China may work out an arrangement that met their concerns and this arrangement was thereafter forced upon other countries. We need to guard against this possibility and ensure that India’s concerns were also accommodated in whatever international regime for Internet governance that ultimately emerged,” the note adds. Notably, today India has third largest Internet users in the world at over 15 crore, only after China (56 crore) and the U.S. (25 crore).

Similarly, India has also decided to favour a pre-dominantly multilateral approach on issues related to Internet governance rather than multi-stakeholder approach which is mainly being advocated by the West. “India feels that the very term multi-stakeholder was something of a ‘misnomer’. A small unrepresentative group of certain individuals, supported by vested interests, appear to have arrogated themselves the right to present certain views in discussions relating to Internet governance. It was not clear as to who they represent and whether who they claimed to represent had in fact nominated them. These persons undermine the positions of the government and were really spokespersons of certain Western interests,” the note says.

After China Now French Central Bank Warns Of Bitcoin Risks

1606-83923The process of regulation of Bitcoins around the world has started. Initially, Thailand banned use and dealing of Bitcoins in its jurisdictions. Then the People’s Bank of China (PBC) warned financial institutions against risks of fraud and money laundering due to use of Bitcoins.

Now it has been reported by TOI that the France’s central bank has warned against the use of the virtual currency Bitcoin, noting that it is not only highly volatile but also unregulated by authorities.

It seems the central banks around the world are now coming against the use of Bitcoins. However, the Reserve Bank of India (RBI) is still sleeping over the issue despite increase in illegal use of Bitcoins in India. The Indian approach towards Bitcoins is not at all conducive for national interest and Indian government must urgently regulate Bitcoins in India as soon as possible.

The Bank of France is skeptical about the currency, and underlined that the “highly speculative” currency poses a “certain financial risk” to users. “Even if the high volatility of the Bitcoin is of possible interest for individual or professional speculators, they should be aware of the risks they are taking,” the bank said. In addition, there are no official security guarantees for the electronic safes which store the virtual currency, making the user vulnerable to cyber attacks. Further, the convertibility of Bitcoin is not ensured and an investor could be unable to regain his investment.

The central bank noted that if a currency is to be used as a mode of payment, it should meet rules against money laundering, and its security platform should be monitored by the Bank of France. Nevertheless, the bank has no oversight of Bitcoin, and urged instead for action to prevent the virtual currency from being used in illegal transactions.

It is high time for Indian government and RBI to do needful in this regard.

People’s Bank of China (PBC) Warned Financial Institutions Against Risks Of Fraud And Money Laundering Due To Use Of Bitcoins

People's Bank of China (PBC) Warned Financial Institutions Against Risks Of Fraud And Money Laundering Due To Use Of BitcoinsReserve Bank of India (RBI) has the statutory obligation to maintain financial stability and currency legitimacy in India. However, RBI is failing in this statutory obligation by leaving the Bitcoins unregulated and allowing them to be used as an alternative to Indian currency. The illegal use of Bitcoins is increasing and RBI is not doing anything in this regard.

It seems the Indian approach toward Bitcoins is of indifference rather than of concern. Thailand has recently banned use and dealing of Bitcoins in its jurisdictions. Now even the People’s Bank of China (PBC) has warned financial institutions that they should be “on guard” against the use of Bitcoins because of risks of fraud and money laundering. RBI, on the other hand, is not fulfilling its statutory duties in this regard. As a result Bitcoins are used in India for multiple purposes including conducting medical and surgical abortions in India.

As per RT, PBC has issued a joint statement along with five other ministries that has clarified that Bitcoin has “no legal status or monetary equivalent”.  PBC has also urged financial and payment institutions not to use Bitcoin pricing for products or services, may not trade or sell Bitcoins, sell Bitcoin-related insurance, provide customers with Bitcoin registration, trading or other services, conduct Bitcoin storage, issue mortgages in Bitcoin, or set up investment funds or trusts based on the currency.

Individuals however, are free to buy and use Bitcoin at their own risk, and PBC cannot be held accountable for any losses, as the digital currency is not tied to any government or central banking institution.

We at Perry4Law and Perry4Law’s Techno Legal Base (PTLB) believe that China has adopted the right approach that India is not willing to undertake. Indian government and RBI must understand that the sooner position of Bitcoin is clarified the better it would be. Waiting for other nations and authorities to take a stand and then regulating Bitcoin shows weakness of and lack of insight on the part of Indian government and RBI.

With its growing popularity, Bitcoins frauds and crimes are also increasing world over. Cyber criminals and crackers have started exploiting software and the platforms using Bitcoins. In one such incidence Sheep Marketplace, the descendant of Silk Road, has been compromised and 5,400 Bitcoins (worth about $5.6 million) have been stolen. India would also not be free from troubles and the inaction on the part of Indian government and RBI would only make things worst.

Bitcoins Banned In Thailand And May Be Illegal In India As Well Unless Laws Are Followed

Bitcoins Banned In Thailand And May Be Illegal In India As Well Unless Laws Are FollowedBitcoins is a decentralised and cryptographic virtual currency whose legality is still unclear in many jurisdictions. Most of the jurisdictions have adopted a “wait and watch policy” regarding Bitcoins.

The United States tried to curb the use of Bitcoins with existing laws but the same has not become a complete success so far. China has though not officially recognised Bitcoins but it has also not made their use illegal as well. India is still analysing the use of Bitcoins and may come up with its verdict in this regard very soon.

Meanwhile, trading of Bitcoins suspended in Thailand due to Bank of Thailand advisement (PDF). According to this document/statement, Bitcoin gave a presentation about the workings of Bitcoin, the benefits of Bitcoin, insight into the company’s operations and future implications of Bitcoin to the Bank of Thailand.

At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:

(a) Buying Bitcoins

(b) Selling Bitcoins

(c) Buying any goods or services in exchange for Bitcoins

(d) Selling any goods or services for Bitcoins

(e) Sending Bitcoins to anyone located outside of Thailand

(f) Receiving Bitcoins from anyone located outside of Thailand

Based on such a broad and encompassing advisement, Bitcoin Co. Ltd. therefore has no choice but to suspend operations until such as time that the laws in Thailand are updated to account for the existence of Bitcoin. The Bank of Thailand has said they will further consider the issue, but did not give any specific timeline. Bitcoin Co. Ltd. has currency exchange applications currently pending review with the Bank of Thailand.

The question that can be asked is whether use and dealing in Bitcoins legal or illegal in India? At present dealing in Bitcoins in India is a risky affair as the legality of Bitcoin in India in doubts. For instance, the Information Technology Act, 2000 (IT Act 2000) is the cyber law of India that governs the online acts or missions in the Indian cyberspace.

The IT Act 2000 prescribes cyber law due diligence in India and the Internet intermediary liability in India. These cyber laws due diligence and Internet Intermediary requirements squarely apply to use of Bitcoins in India. However, none of the Bitcoins enthusiastics are following the applicable laws of India as on date. Thus, they are violating the laws of India and can be prosecuted both civilly and criminally.

Indian Virtual Currency Schemes And Reserve Bank Of India

Indian Virtual Currency Schemes And Reserve Bank Of IndiaBanking industry of India is trying to capatilise the benefits of information and communication technology (ICT). The same is not possible till the modern banking infrastructure is supported with appropriate legal framework in this regard. It has been reported that an integrated modern banking law for India in pipeline. Till now there is no sign of any such much need integrated banking law of India.

The Reserve Bank of India (RBI) is slow in this regard even though RBI has acknowledged risks of e-banking in India. Although RBI has recently directed that all banks would have to create a position of chief information officers (CIOs) as well as steering committees on information security at the board level at the earliest yet these recommendations have not been implemented by the banks.

This is so despite the fact that the Security and Risk Mitigation Measures for Card Present Transactions in India have been brought into force by RBI. According to the Circular numbered RBI/2013-14/296, DPSS (CO) PD No.719/02.14.011/2013-14, issued on September 27, 2013, RBI has finally brought into force the mandatory provisions of the circular numbered DPSS.PD.CO.No.513 / 02.14.003 /2011-2012 dated September 22, 2011 on security issues and risk mitigation measures related to Card Present (CP) transactions and circulars DPSS (CO) PD No.1462 / 2377/ 02.14.003/2012-13 dated February 28, 2013 and June 24, 2013 respectively on security and risk mitigation measures for electronic payment transactions, wherein various timelines were indicated for compliance.

Indian banks are poor at cyber security implementation and even this measure of RBI would fail to achieve the desired objectives. While these measures are still waiting to be implemented by Indian banks, RBI is Exploring Use of Encrypted SMS Based Fund Transfers in India. However, India is not ready for Mobile Governance and the Mobile Payments Cyber Security in India is needed before implementing such ambitious initiatives.

All these factors would play a decisive role in the implementation or non implementation of any virtual currency scheme applicable in India. The Financial Stability Report by Reserve Bank of India (RBI) June 2013 (PDF) is another significant report regarding virtual currency schemes in India.

The report indicates that alongside the rapidly increasing use of technology in banking and finance in recent years, the risks emanating from abuse and failure of technology have also risen. The recent cases of cyber frauds at some banks have highlighted the increasing complexity, sophistication and diversity in the risks to the security and integrity of technology based banking and finance. Globally, the use of online and mobile technologies is driving the proliferation of virtual banks, virtual currencies and provision of banking and payment services by unlicensed entities. While leveraging on technology has resulted in many benefits, especially, in extending the reach of the financial services, these developments pose challenges in the form of regulatory, legal and operational risks.

One of the main risks related to the information technology (IT) systems in banks relates to the obsolescence of the technology and processes built according to the needs of the then prevailing regulatory-cum-business environment. Therefore, a review of suitability of the existing IT infrastructure is required to be carried out to assess the capability of the IT systems to handle the changing demands of business and compliance functions in the evolving environment.

According to the document titled Virtual Currency Schemes by European Central Bank October 2012 (PDF), a virtual currency can be defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. The virtual currency schemes provide a financial incentive for virtual community users to continue to participate and are able to generate “float” revenue for their owners. They also provide a high level of flexibility regarding the business model and business strategy for the virtual community.

There are different kinds of virtual currency schemes in vogue at present. While for some kinds of virtual currencies there is no interaction or exchangeability with the “real” currency, for others the relationship with the real money, goods and services is more active and direct. The “closed” virtual currency schemes, which are mostly used in online games, have no connection with the real money. Some virtual currency schemes offer the facility of a (mostly unidirectional) conversion rate for purchasing the virtual currency, which can subsequently be used to buy virtual goods and services. Under another category of virtual currency schemes which provide for bidirectional flows, the virtual currency acts like any other convertible currency, with two exchange rates (buy and sell). In such schemes, the virtual currency can be used to buy not only the virtual goods and services, but also to purchase real goods and services. Virtual currency schemes are different from electronic money schemes as the virtual currency being used as the unit of account has no physical counterpart with legal tender status.

A virtual currency scheme may also be designed to compete with traditional currencies used for international trade. The absence of a distinct legal framework implies that the traditional rules under financial sector regulation and supervision, including the institution of central banks, are not involved in the case of virtual currency. Also, the unregulated link between virtual currency (if permitted), and traditional currency with a legal tender status poses challenges as the complete control over the differently denominated virtual currency is given to its issuer, who governs the scheme and manages the supply of money at will.

The regulators are studying the impact of online payment options and virtual currencies to determine potential legal, regulatory and other risks associated with them.

Bitcoins, Their Functionality And Legality Of Use

PRAVEEN-DALAL-MANAGING-PARTNER-OF-PERRY4LAW-CEO-PTLBDigital or Virtual Currency is gaining importance day by day. In many Jurisdictions these Digital Currencies are allowed to be used to purchase goods and services. They can also be traded for real money in real world in many Jurisdictions.

The most prominent Digital Currency of contemporary times is known as Bitcoin. Although many Jurisdictions have tried to regulate Bitcoins yet they have not achieved much success in this regard. Even the United States Federal Bureau of Investigation (FBI) temporary closure of the online black market Silk Road has made little effect on Bitcoins.

So what is a Bitcoin and how it works? According to Wikipedia, Bitcoin is a peer-to-peer digital currency that functions without the intermediation of a central authority. The concept was introduced in a 2008 paper by a pseudonymous developer known as Satoshi Nakamoto.

Bitcoin has been called a crypto currency because it is decentralized and uses cryptography to control transactions and prevent double-spending, a problem for digital currencies. Once validated, every individual transaction is permanently recorded in a public ledger known as the blockchain. Payment processing is done by a network of private computers often specially tailored to this task. The operators of these computers, known as “miners”, are rewarded with transaction fees and newly minted Bitcoins.

Bitcoins are stored by associating them with addresses called “wallets”. Wallets can be stored on web services, on local hardware like PCs and mobile devices, or on paper print-outs. Thefts of Bitcoins from web services and online wallets have been covered in the media, prompting assertions that the safest way to store Bitcoins is in secure paper wallets.

With the growing significance of Bitcoins, Cyber Criminals have started targeting the same. In many cases Bitcoins have been stolen by Cracking the Computer Systems, by compromising the Private Encryption Key and by using other “Innovative Methods”. The latest to add to this series is the use of Distributed Denial of Service Attack (DDOS) against the Institutions managing Bitcoins and demanding ransom for ceasing to do so.

The Technological Structure of Bitcoins is such that once they are transferred, either legally or illegally, it is very difficult to reverse the transaction. Of course, if the parties to the transaction can be identified and both of the parties agree to reverse the transaction that is still possible. But such a scenario is very rare in the present times.

Governments and Regulatory Bodies around the World are wary to deal with Bitcoins. Every attempt to label Bitcoins illegal has only kick backed. United States has just realised that if it is too harsh to the Bitcoins, the Bitcoin Infrastructure may shift to more friendly destinations like China. Besides many Countries would encourage Bitcoins to operate in their Jurisdictions as this would benefit their Economy and may damage the grip of Dollar in the World Market. The dealing in Bitcoins in India is still A “Grey Area” and it is not safe to consider it “Strictly Legal”. Till the time Indian Government or other Regulatory Authorities of India make use and dealing of Bitcoins Legal in India, the use of the same in India is at the own “Legal Risk” of concerned person or Institution.

Provisional And Regular Licence Under The Sikkim Online Gaming (Regulation) Act, 2008

Provisional And Regular Licence Under The Sikkim Online Gaming (Regulation) Act, 2008Sikkim is the most liberal State for allowing online gaming and betting in India. As per the Constitution of India, gambling and betting is a State Subject and States are free to enact laws as per their own requirements.

The Sikkim Online Gaming (Regulation) Act, 2008 has provided a legal framework for online gaming in India. This is a revolutionary piece of legislations as it has tried that no other State has been able to achieve. The 2008 Act has been notified (PDF) and it is now operational in the State of Sikkim. Even an authorised officer (PDF) has been appointed under the 2008 Act by the Sikkim Government.

In order to make the provisions of 2008 Act operational, the Sikkim Online Gaming (Regulation) Rules, 2009 (PDF) were formulated. Perry4Law and Perry4Law’s Techno Legal Base (PTLB) have discussed these Rules 2009, along with necessary 2009 amendments, for the larger interest of all stakeholders.

Under the Sikkim Online Gaming (Regulation) Act, 2008 there are provisions regarding granting of provisional and regular licences.

A provisional licence is first issued by the Government of Sikkim if it is satisfied that the application made by the applicant complies with all the requirements prescribed in this regard. A fee of Rs. 1 lakh must be given by the applicant and he/she/it must set up the necessary infrastructure and other requirements so as to be in a position to commence operation of online games and the sports games.

If the Government is satisfied that the applicant is fully ready to commence operations of online gaming and sports gaming activity and has complied with the stipulations prescribed in the said provisional licence and such other terms and conditions prescribed in the Act and Rules, the Government may grant a regular licence for operation of online games and sports games in Form-2A for five years on payment of a fee of five lakh rupees.

For enabling the conduct of Online Games and Sports Games specified under Rule 3 of the Sikkim Online Gaming (Regulation) Rules, 2009 the following terms and conditions shall apply:

(1) The provisional licence is issued for the specific purpose of enabling the applicant company to set up and establish the entire requisite infrastructure and other components necessary for actual commencement of online gaming and sports gaming activity.

(2) The provisional licence does not confer any right to the licensee to commence its online gaming and sports gaming unless and until all the requirements stipulated by the State Government are fulfilled and the regular licence is issued by the Government.

(3) The Licensee shall operate Online Games and Sports Games from Sikkim only.

(4) The Licensee shall commence actual online gaming and sports gaming operations, i.e., “go live” within 120 days.

(5) The licensee should make available only the games specified under rule 3 of the Sikkim Online Gaming (Regulation) Rules, 2009. If the licensee intends to include new games, prior approval of the Government must be obtained.

(6) The Licensee shall allow any Officer authorized by the Government to inspect the setup process or inspect premises from where the online games are to be operated.

(7) The Provisional licence is valid for 120 days from the date of issue and immediately on the licensee intimating in writing to the Government that it is ready to commence actual online gaming and sports gaming operations, i.e., “go live” and on such determination by the State Government that the applicant licensee has complied with the stipulations prescribed hereinabove and such other terms and conditions prescribed in the Act and Rules, the licensee may be granted a regular license for a period of five years on payment of fees of five Lakhs rupees as provided under the Rules.

(8) The Licensee shall pay to the Government a sum of one lakh rupees as Provisional License fee through a Bank Draft in favour of the Director, Sikkim State Lotteries, and submit the same before issue of the said licence.

(9) The provisional license is liable to be cancelled if the licensee violates any of the above terms and conditions and the provisions of the Sikkim Online Gaming (Regulation) Act, 2008 and the rules made thereunder.

Telemedicine And Online Pharmacies Laws In India And Their Legal Implications And Liabilities

Telemedicine And Online Pharmacies Laws In India And Their Legal Implications And LiabilitiesInformation and communication technology (ICT) is proving a useful tool in all spheres of our day to day lives. This also applies to the healthcare sector of India. Medical practitioners and hospitals have started using ICT to effectively manage their medical services.

However, there is a problem with this growing use of ICT by medical practitioners and hospitals. In their zest to use ICT for furthering their medical objectives, these medical practitioners and hospitals are flouting Indian laws. Simply putting we have no dedicated telemedicine laws in India and online pharmacies laws in India. However, different laws of India govern the telemedicine and online pharmacies aspects in India.

As on date the online pharmacies in India are violating Indian laws and Indian government is well aware of these violations. In fact, online pharmacies websites of India are under regulatory scanner and punishment may follow. Despite contrary beliefs, online sales of prescribed medicines in India cannot be done through a mere opening of website.

The growing craze of e-commerce among Indian medical entrepreneurs has witnessed a spurt of many online pharmacies and telemedicine operations in India. However, most of them are violating the laws of India and some of these laws prescribe very serious punishment for these violations.

While we have basic level e-commerce legal framework in India yet e-health related legal framework is missing. For instance, e-health in India is facing legal roadblocks. Till now we do not have any dedicated e-health laws and regulations in India. The legal enablement of e-health in India is urgently required.

When technology is used for medical purposes, it gives rise to medico legal and techno legal issues. In United States, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine.

As far as India is concerned, we have no dedicated e-health and telemedicine laws in India. Even essential attributes of these laws like privacy protection, data protection, data security, cyber security, confidentiality maintenance, etc are not governed by much needed dedicated laws. Time has come to enact a dedicated law that allows online sales and purchase of prescribed drugs and medicines in India.

There is a tendency among medical e-commerce players in India to ignore Indian laws. The Walmart probe , banned drugs regulation in India , e-trading of medicines, digital communication channels , etc have proved that Indian laws must not be taken lightly.

Similarly, many telemedicine and online pharmacies initiatives in India rely upon cloud computing without knowing and following the legal and regulatory issues of cloud computing in India.

Those engaged in telemedicine and online pharmacies must keep in mind the legal requirements prescribed by Indian laws like Information Technology Act 2000, Drugs and Cosmetics Act, Indian Medical council Act, Code of Ethics Regulations 2002, etc.

The biggest mistake that most of the telemedicine and online pharmacies initiatives in India commit is by believing that offline medico legal requirements can be safely used for online requirements. This is not true and is a fatal misconception as it may bring legal consequences and liabilities.

Online dealings of medicines and healthcare services have their own set of problems and legalities and they must be fully complied with to do an online business. Selling medicines online and providing of online healthcare services in India is not like selling other day to day commodities and they have grave risks attached with their very dealings. Great precautions and absolute compliance with the laws of India is required for their online operations.

The ultimate call is for Indian government to take as it has failed to regulate this much needed field so far. Not only Indian government failed to make dedicated laws in this regard but it has also failed to take stringent action against those who are running illegal online pharmacies and telemedicine shops in India.