ONDC delays levying network fee again on stakeholder feedback

The Open Network for Digital Commerce (ONDC) has postponed implementation of a network infrastructure development and services fee it had proposed to levy seller apps on the government-backed network.The fee will now be collected from July 1, according to an ONDC notification seen by ET. It was initially planning to levy the fee from January 1, which was then postponed to April 1.

The notification cited feedback received from network participants and other stakeholders on the implementation timeline for the three-month postponement.

The non-profit network hopes to be self-sustaining in the long run. It had reported a cash burn of Rs 195.61 crore for fiscal 2023-24.

ONDC on December 3 had first announced that it would be levying a network fee of Rs. 1.50, exclusive of taxes, on seller apps for every successful transaction where the total transaction value exceeds Rs 250 after discounts and taxes.

The current extension aims to provide stakeholders with sufficient time to align their internal processes and ensure a seamless transition to the fee regime.

ONDC is developing the infrastructure and providing essential network services to facilitate interoperable transactions across various product and service categories. These services include technology enablement, network participant onboarding support, community management and policy development. The network fee is intended to support the ongoing development and maintenance of this infrastructure and critical services.The December 3 notification had outlined the structure of the fee, the process for invoicing (it has to be done by the 15th of the following month), a 10-calendar day payment timeline via bank transfer to ONDC’s account and a dispute resolution mechanism, with further escalation guided by the ONDC Network Policy.

While the latest postponement offers further relief to network participants, it underscores the ongoing dialogue and adjustments being made as the ONDC network evolves.

ONDC has indicated that any future amendments to the fee structure, including the quantum, nature, applicability and implementation mechanisms, will be communicated through official notifications at least 30 days in advance of their applicability.

The fee has been calibrated to sustain the infrastructure and critical network services, as well as to allow for innovation and development to meet the network’s evolving needs, ONDC had said in its first notification on the matter.

This decision follows extensive consultations with network participants, ONDC had said.