Skip to main content

Govt looks to bring e-commerce companies under competition laws

The government is considering bringing e-commerce companies under the ambit of consumer protection and competition laws in an attempt to safeguard consumer interest and prohibit predatory pricing.
Commerce and industry minister Nirmala Sitharaman discussed these and other issues related to e-commerce and so-called multi-brand retailing with state industry ministers on Wednesday.
The meeting was part of the stakeholders’ consultation triggered by the order from the Delhi high court to the government asking to consider a representation by the Retailers Association of India (RAI).
The industry lobby moved the high court in May seeking parity between online and offline retailers. RAI alleged that e-commerce companies were calling themselves marketplaces while still engaging in retail activity. India doesn’t allow foreign direct investment in online retailing but allows it in marketplaces. Sitharaman has also met banks, officials from other ministries, and executives from both brick-and-mortar and online retailers and marketplaces as part of this process.
The focus of Wednesday’s meeting was to ensure offline and online retailers (and marketplaces) were treated the same way so as to not give an unfair advantage to either.
Arvind Singhal, chairman of retail consultancy Technopak Advisors, said most of the regulations being discussed need a commonsense approach rather than consultations.
“Any business dealing with consumers directly need to be brought under consumer protection act and if there are any anti-competitive practice, they should face the CCI (Competition Commission of India). Government should move with time and abolish any distinction between physical and digital retailers,” he said.
With the increasing penetration of the Internet and smartphones, online vendors such as Flipkart, Snapdeal and Amazon have eaten into the market share of brick-and-mortar retailers with aggressive promotions and discounted sales.
“There was consensus that there should be standardisation of packaging and labelling—name and address of the original sellers should be displayed over the package,” a government official present in the meeting said.
The petition by RAI, while seeking a level playing field, cited several instances of large e-commerce companies such as Amazon and Flipkart creating alternative routes and structures to attract foreign capital.
Currently, the government allows 100% foreign direct investment (FDI) only in business-to-business e-commerce but not in retail e-commerce. However, brick-and-mortar retailers allege that current big online retailers flout existing norms and engage in retail activities even while claiming to be marketplaces.
While most e-commerce players follow a marketplace model, claiming to be only platforms for buying and selling of goods, there is no legal definition of marketplace issued by the Indian government, creating a policy grey area.
As for offline retail, in 2012, the United Progressive Alliance government allowed foreign investors to hold up to 51% in multi-brand outlets (supermarkets and the like) in India.
The National Democratic Alliance government has kept the policy in abeyance as its key constituent Bharatiya Janata Party is opposed to the idea. However, the 2012 decision has not been reversed.
Many states, including some Bharatiya Janata party-ruled ones such as Rajasthan and Madhya Pradesh, said that they were in favour of providing a level-playing field to both e-commerce and multi-brand retailers and supported allowing FDI in both the sectors, according to people present at Wednesday’s meeting. Only Tamil Nadu opposed FDI in multi-brand retail.
“Based on the inputs of the state governments, we will work on some sort of guidelines for retail and wholesale e-commerce as well as FDI in e-commerce. But we are not sure that we will resolve all existing concerns,” a second government official present in the meeting said. States have been given 15 days to hold wider consultation and communicate their position in writing.
Haryana industry minister Captain Abhimanyu said there was general consensus that FDI in retail is in the interest of the country, but that the interests of the consumer, small retailers and small manufacturers should not be compromised. “We will provide inputs after holding consultation with stakeholders including small retailers, small enterprises and dairy farmers. We expect the centre to provide details on what happened in different countries where similar experiments were done. Were they really helpful to the local economies of the country? We can’t take such decisions on the basis of ideology. We have to take a pragmatic view,” he added.
Several states have also said there is a lack of clarity on taxing e-tailers and marketplaces.
Some of the states present in the meeting said the goods and services tax (when it is implemented) would take care of the current confusion. Others demanded amendments in the current tax laws till the time GST is implemented, the second government official added.
HT Mint, New Delhi, 16th July 2015

Comments

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s