The Confederation of All India Traders (CAIT) in a communication sent to Finance Minister Smt. Nirmala Sitharaman today charged the e-commerce companies particularly Amazon and Flipkart through their festival sales are depriving the Government with huge amount of GST revenue.
In its communication with to Finance Minister, the CAIT said that “Festival Sales ” of various E-Commerce Companies particularly of Amazon & Flipkart beginning from today and which are in utter violation of FDI Policy of the Government. It’s ironic that if a trader makes even a slight mistake during the course of his business, he is subjected to several penalties and even prosecution. However, these E-Commerce Companies which are authorized to do only Business to Business (B2B) activities are conducting Business to Consumers (B2C) sales right under the eyes and nose of the Government and no action has been taken so far against them for such a blatant violation of FDI Policy.
CAIT National President Mr.B.C.Bhartia & Secretary General Mr. Praveen Khandelwal invited attention of the Finance Minister towards the sales of large number of commodities particularly during the period of ” festival sales” of these e commerce companies where goods are being sold at a much lesser price than the actual price by offering deep discounts from 10% to 80% which is nothing but a predatory pricing and the GST which is supposed to be charged on the actual market price of the commodity in normal case is now being charged on the price after deducting the discounts offered and this is nothing but underpricing of the commodity by these e commerce portals thereby causing huge loss of GST revenue to the Government. Likewise, proportionally if goods are rightly valued, it could earn substantial Income Tax as well to the Government.
Both Mr. Bhartia & Mr. Khandelwal said that its an open fact that deep discounts offered by these e commerce companies are funded by their investors and in actual terms they are not the losers, the ultimate looser is the Government in shape of revenue which it ought to have received on actual market price but due to open manipulations of these e commerce companies, the Government is denied of its due revenue. It is very astonishing that these Companies are running into losses since last so many years but still they are continuing with their business operations and holding festival sales and other sales round the year from time to time. Even otherwise also they keep on giving huge discounts by way of predatory pricing and deep discounting. Has is it possible for a loss making company is a question which needs to be answered.
Mr. Bhartia & Mr. Khandelwal clarified that traders are not against e-commerce business and having a firm view that e-commerce is future mode of business in the Country and also do not fear from any competition but there has to an even level playing field where there should not be any element of predatory pricing, deep discounting or loss funding which is also the motive of FDI policy. But for a long time, these companies have scant respect for FDI policy.
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