A legal framework for e-commerce has been provided by the Information

Technology Act, 2001, making India only the twelfth country worldwide which
has such a comprehensive legislation for e-commerce in place. This Act also
effects consequential amendments in the Indian Penal Code, the Indian Evidence
Act, 1872, and the RBI Act, 1934 to bring them in line with the requirements of
digital transactions. (Similar amendments are being planned for the Companies
Act, 1956 to also facilitate e-commerce and e-governance.)
The basic problem is that e-commerce threatens the very basic concept of PE ,or
permanent establishment, on which most taxation regimes are built.
The few problems what E Commerce faces and government involves is
Electronic Transaction : The money transition is always a big issue in
Indian e retailing market. Customers feel insecure to do the payment. So
here the banks use the IT Security solutions to do the online payment.
Privacy & Security : Customers do not want to display their personnel
information. They find it insecure in providing information about their
bank details and e ids.
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