E-commerce or Digital Commerce has become a part our day-to-day life with the emergence of new technologies slowing changing the way transact things. Though an aspect of this change, which we neglect to look into at the Domestic, National and International Level and which will play a major role in shaping the fiscal resource of any country. The issue as to whether e-commerce transaction order online and delivered in digital format incur any tariff or tax liability when they cross the virtual border from one country to the other. The issue was identified for the first time by WTO in May 1998, whereby it established a working committee on e-commerce with 4 Sub-committees to suggest possible construction of laws, which will deal with imposition of custom duties and correlated aspects of e-commerce. While recognizing the need for levying custom duties on a major area of commerce still untouched by the clutches on any rules, WTO still came to a harsh reality that such levying cannot be imposed without first creating the laws itself to deal with it. So WTO members decided to impose a temporary moratorium of zero custom duties (so-called WTO Duty-free Moratorium on Electronic Transmissions) till the time legislation or rules enacting the same are enforced. It has been more than 2 decades since then, but WTO has failed to produce a single rule, law or agreement clarifying the stand and clearing the cloud on this temporary moratorium. They on the other hand with dominant position by developed countries keeps on extending this temporary moratorium after every 2 years using the same excuse of absence of any law, which they themselves have failed to reproduce. The author in this research paper dwell into the resolution of this long pending issue by analyzing the rules applicable and modification required to bring at par the principles and commitment of GATT and GATS on such Digital Products.

 Download Full Paper