CA Dr Arpit Haldia

Arpit Haldia

GSTUpdates-5: Analysis of various Terminologies used in definition of Electronic Commerce in GST Draft Law:

In the previous update, I had discussed about definition of Electronic Commerce, Electronic Commerce Operator in GST Draft Law and the definition of Electronic Commerce as per OECD Guidelines. However, to understand the definition of Electronic Commerce, it is imperative that we understand the various technical terms used in the definition.

In this update, I have attempted to discuss those term used in the definition of Electronic Commerce. Though, they are technical terms and it’s hard to understand them without having specialized knowledge but since they form part of the definition of e-commerce, a brief introduction of the same is required to have a better understanding of the definition. The details of these technical terms have been compiled through various sources over the web. The basic purpose of this update is to give introduction to the various terms used in the definition of electronic commerce and the same are discussed as below:

1. Electronic Network: A network can be defined as two connected points. For example a person talking to another face to face can constitute a network. Telephone Network connect two people across the two telephone Instruments. Television Networks connects large number of people.

An electronic network is considered to be the connection, or linking of two or more computers to allow data and Information Exchange. Electronic Computer network may be as small as two computers or as large as the Internet, considered to be network of networks.

2. Instant Messaging Apps: The common examples of Instant Messaging Apps are Whatsapp, Viber, Wechat etc.

3. Shopping Carts: Shopping Carts are nothing but the software which allows us to accumulate the selections we made on the website through “add to cart”. Once the selection is done then we are allowed to checkout and the aggregate of the purchases is done and we are asked to pay the total purchases made by us.

4. Web service: Web service is the means by which the devices communicate over the World Wide Web.

Web portal while discussing web services provides that whether we use a mobile application, search engine or an enterprise system, the user piece of the application (the interface) resides on our device. The data, and potentially business rules, live on some other server on the network. How our interface communicates with the server piece is the role of Web Services.

It further adds that the communication between servers requires an agreed-to format and structure: “I need to understand what you want, and you need to understand what I send you.”

In one of the descriptions about web services on the webportal, it has been provided that in mobile devices, front end is built in fancy framework say like Titanium, but they fetch their data through a SQL Server using Web Service built with Microsoft’s WCF-Rest approach. They store their data, Synch their data through a Web Service.

In another the example on the webportal about how web services are used, it was explained that suppose an organization has a very large shopping Website, and it is standalone i.e. they are the only users of its database, its data, its users. Another Client wants to model it and make use of its existing data and logic of the company either on a free basis or a paid basis, but they have got JAVA platform. The entire system of the company is built on ASP.NET 3.5. This is where the web services come into us and allow the two systems to interact.

In other words, web service is a system designed when we want to share the data with some other people in an agreed format.

5. UDDI: Universal Description, Discovery and Integration: This is more of a system of yellow pages as we find in today’s business world. It’s a concept which was developed online in the year 2000 but then since has lost its major relevance.

UDDI has been described on the Wikipedia as

“a platform-independent, Extensible Markup Language protocol that includes a (XML-based) registry by which businesses worldwide can list themselves on the Internet, and a mechanism to register and locate web service applications.”

Wikipedia further provides that UDDI is a business registration and listing concept consisting of three components which are as follows:

  • White Pages — address, contact, and known identifiers;
  • Yellow Pages — industrial categorizations based on standard taxonomies;
  • Green Pages — technical information about services exposed by the business.

The group defining UDDI, the OASIS Universal Description, Discovery, and Integration (UDDI) Specification Technical Committee voted to complete its work in late 2007 has been closed. IBM, Microsoft, and SAP closed their public UDDI nodes in January 2006. In September 2010, Microsoft announced they were removing UDDI services from future versions of the Windows Server operating system. Instead, this capability would be moved to BizTalk Server. In 2013, Microsoft further announced the deprecation of UDDI Services in BizTalk Server. Therefore, as a concept UDDI has lost much of its relevance.

6. FTP: FTP has been defined in the Educator’s Guide to Electronic Networking: Creating Virtual Communities-By Barbara L. Kurshans” as

“It is an Internet Standard, high level protocol that allows files and software to be transferred and/or retrieved from another computer attached to a network (such a system is called a host, a nod, the system or the network.)”

Webportal provides that webmasters use FTP software to upload files from their computer to a web server. Some companies use FTP to distribute software updates, patches and forms. Although you can use dedicated FTP clients such as Cute FTP, WS_FTP and others, It’s easy to connect to FTP servers using your browser if you know the FTP browser syntax.

The webportal further provides that each organization determines how they wish users to connect to their FTP server. There are three basic ways:

a) Anonymous FTP access – This is the easiest connection method. You do not need to include any user information. Some common examples are software companies (Microsoft) or government sites (GOV) where you can download forms.

b) User name required – In this instance the organization wants you to have an account to access the site. Schools tend to use this type of access.

c) User name + password – This is the most restrictive as the user has to have an account and password to gain access to the site. Many websites use this method for people to upload files to the server.

For most anonymous logins, the FTP browser syntax is the same regardless of browser. On needs to type ftp://ftp.server_name in his browser’s address bar. For example,”

7. Electronic Data Interchange (EDI): The term has been defined on Wikipedia as an electronic communication method that provides standards for exchanging data via any electronic means. By adhering to the same standard, two different companies or organizations, even in two different countries, can electronically exchange documents (such as purchase orders, invoices, shipping notices, and many others).

Wikipedia further provides that EDI distinguishes mere electronic communication or data exchange, specifying that “in EDI, the usual processing of received messages is by computer only.

EDI has been discussed as the most commonly used B2B e-commerce technology today. It has been further provided that EDI is the computer-to-computer exchange of business documents, such as purchase orders and invoices, in a standard electronic format between business partners. EDI has been in use across many industries, including retail, banking, manufacturing, high-tech and services, since the 1980s and it remains a game-changer.

From the author: In the next update, I will analyse definition of electronic commerce comprehensively with keeping in background the above technical terms and how wide and unrealistic, drafters of the law have made the definition.

Know About Depreciation as per Companies Act 2013 Here

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (6437)
Type : Articles (16477)

Leave a Reply

Your email address will not be published. Required fields are marked *