This story and the characters are real. The identity is not disclosed to maintain confidentiality. We may call them consumer, seller, and e-commerce entity (entity for short). The blog is primarily intended for consumer awareness.
An online booking
The consumer used the online portal of the entity to book an accommodation in Paris, France. The intended check-in and check-out dates were the 27th and 29th of April 2025, respectively. The seller, a reputed group operating in Europe, owned the property. The booking was confirmed for a total amount of Rs 19,817.64 from the 27th to the 29th of May 2025, and the entity notified the booking as non-refundable.
The consumer blames a technical snag for the confirmation of incorrect booking dates. The entity disputes the claim of technical snag, but does not have any provision for the correction of mistakes. The modification of the booking will be treated as a fresh booking without giving any credit for the mistaken booking.
The story had a happy ending, as the concerned stakeholders realised that they are on a sticky wicket. The entity agreed to a full refund of the non-refundable confirmed booking. Thanks to the consumer-centric laws of the European Union and India.
The Right of Withdrawal
The European Union Consumer Code, applicable to the Schengen Area, recognises the consumer's right of withdrawal, commonly known as the "right to reconsider". The right of withdrawal allows the consumer to change their mind about the purchase made, freeing themselves from the contract concluded without giving any reason, and the consumer is entitled to a full refund.
The right of withdrawal is available for distance or off-premises contracts concluded between traders and consumers. The right is not without exceptions. However, a booking of residential accommodation does not fall in the list of exceptions. But the right is not available for low-value contracts. 50 Euro is the lower threshold for exercising this right. The Seller recognises the consumer's right of withdrawal and has included appropriate provisions in their refund policy.
The refund policy of the seller
The Seller's refund policy acknowledges a limited right of withdrawal, as the reconsideration period is 21 days before arrival, whereas the code offers an even shorter period of 14 days. The consistency of the refund policy with the provision for the right of withdrawal under the code is not relevant to the present discussion, as the right was exercised before the period specified in the seller's terms. Consequently, consumer's right to a full refund is beyond dispute. The relevant portion of the seller's refund policy is extracted here.
Cancellation
by the customer
Any
Cancellation, whether total or partial, must be notified to the Establishment
in writing (letter, fax, email) and will give rise, unless otherwise specified,
to the following charges:
- for any
cancellation made more than 21 9twenty-one) days before the date of arrival:
the Establishment will refund the deposit received by the Customer;
- for any cancellation 21 (twenty-one) days or
less before the date of arrival: the Establishment retains the totality of the
deposit paid. …
An e-commerce entity under the indian law.
The Consumer Protection Law of 2019 proposes measures to prevent unfair trade practices in the e-commerce sector. The Central Government was empowered to regulate the electronic service providers through suitable subordinate legislation. In exercise of the power contained in Section 94 read with Section 101 of the Consumer Protection Act 2019, the Central Government has notified the Consumer Protection (e-commerce) Rules 2020, regulating such providers.
The 2020 Rules define an e-commerce entity, an inventory e-commerce entity, and a marketplace e-commerce entity. The entity neither falls within the purview of an inventory e-commerce entity nor a marketplace e-commerce entity. Hence, the entity is liable for the following among other duties, under the Rules:
Rule 4(8) - No e-commerce
entity shall impose cancellation charges on consumers cancelling after
confirming purchase unless similar charges are also borne by the e-commerce
entity if they cancel the purchase order unilaterally for any reason.
Living in the non-refundable regime of e-commerce
Every other click on the smartphone results in innumerable e-commerce contracts. Not many consumers read the regular physical standard form contracts before putting their hand in time, not to speak of their e-commerce counterparts, concluded in split seconds. The online portal of the e-commerce entity is the last arbiter for refunds. Most of the time, it will not go beyond the desk of the grievance officer nominated on the website of the entity. But the so-called "non-refundable regime" in e-commerce is a sizable economy thriving at the expense of consumer rights, and unnoticed by regulators.
A tax regulator's perspective
In the current transaction, the entity claimed a transaction charge for concluding the contract between the seller and the consumer. The entity was entitled to a transaction charge and had a liability to collect GST for such charges from the consumer. The seller, on the other hand, is entitled to rent for the accommodation and collects the applicable taxes. When the booking is cancelled and the right of withdrawal is exercised within the prescribed period, the seller is liable for a full refund, which the entity is liable to transfer to the consumer. But, the entity citing their contractual term of 'non-fundable' generates a cancellation invoice and claims a refund of the GST paid. Since the seller's terms provide for a full refund, the entity would claim the same, unnoticed by the regulator.
The redressal mechanism
The grievance of the consumer may be ventilated through the various redressal forums established under the 2019 Act. He may claim a full refund of the booking amount and may claim compensation for the legal injury sustained due to the deficient services.. The cause projected may not end with a mere claim before such forms. It has many more facets of unfair trade practices and tax law violations, which require a deeper investigation.
The Central Consumer Protection Authoirty, newly established under the Consumer Protection Act 2019, may be a competent agency to investigate whether the e-commerce entity is committing unfair trade practices and is interfering with consumer rights. The tax regulators have their own job to perform to unearth the rampant tax evasions happening with a click on the smartphone.
Conclusion
The amount of loss for an individual may be insignificant, but these little drops make a mighty ocean. Vigilance is the only method to fight this new age exploitation. Awareness of consumer rights and the information about the redress mechanism may be helpful. The regulators and the competent authorities have a significant role to play in this world of e-commerce.
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