Skip to main content

FD Iine-commerce likely with Make in India rider

Pure play e-commerce ,which implies sale of products by an online retailer directly to consumers,would be permitted to have up to 100 percent foreign direct investment(FDI),if a latest proposal of NITI Aayog is accepted by the Union government.But a rider,that products sold through e-commerce must be manufactured in India to gain from the liberalised regime,could play a spoil sport,said analysts.The idea behind such a condition is promoting Make In India,a signature campaign of the Narendra Modi government.

At present,FDI is not allowed in ecommerce,but there’s no baron foreign investment in the online market place format.There striction forced American major Amazon totweak its inventory-ledglobal business model and operate a market place platform instead in India.Even home-grown Flipkart,funded by marquee foreign investors,switched from inventory model to market place format to comply with the policy guidelines.

In case FDIine-commerce is permitted,as visualised by Niti Aayog and discussed amongst top government officials,the likes of Amazon and Flipkart may be encouraged to shift back to their original inventory model,but the India manufacturing rider may just hold them back,industry stakeholders pointed out. In fact,they cited the mandatory 30 per cent local sourcing in there tail policy (both multi-brand and single-brand)as a hurdle for several international brands starting from Walmart to Ikeato Apple. They added that the rider on India manufacturing in thee-commerce policy may be seen as an extension of mandatory local sourcing.

In March,the government allowed 100 percent FDI in online retail of goods and services under the “market place model”via automatic route,in a step to give a stamp of approval to existing e-commerce companies operating in the country.

Under the market place model,an ecommerce company does not holdany inventory of its own and sells products sourced from multiple third parties.

Sources in NITIA ayog said that the plan is to take a multi-pronged approach to help various different sectors via ecommerce and promote manufacturing in a liberalised FDI regime.“FDI in B2C would help in increased retail sector growth of India made goods,which wouldfurtherhelpsmallandmedium enterprisesandcottageindustry,”saida NITIAayogofficial.

The new norms,if rolled out,would also help improve infrastructure development including logistics,to meet the demand of underserved areas. The revised policy is also targeting to create around 10 million additional jobs by 2020.However,experts said that the move might just endup benefiting a few companies and sectors as they may not be ready to sell only ‘Made in India’products in electronics and other highly specialised segment.

“This could help vertical players in categories lik efurniture,food and groceries,apparel,lingerie,babycareamong otherthings,where they could source the products fully from India.Horizontal market places may not benefit much from such a moves incethe largest category of mobiles,electronics and accessories may not be manufacture din India,”said Sreedhar Prasad,partnerecommerceandstart-ups,KPMGIndia
Business Standard New Delhi,09th November 2016

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