CAIT urges Fin Min to order investigation into business models of e-commerce companies

New Delhi,  Sep 30 (KNN) The Confederation of All India Traders has written a letter to Finance Minister Nirmala Sitharaman alleging that e-commerce companies particularly Amazon and Flipkart through their festive sales are depriving the government with huge amount of GST revenue.

The traders' body has urged the Finance Minister to order an investigation into the business model of these companies.

"Its irony that if a trader makes even a slight mistake during the course of his business, he is subjected to several penalties and even prosecution," said CAIT.

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, it added. 

It said that during festive sales of e-commerce companies a large number of commodities are being sold at a much lesser price than the actual price thanks to deep discounts from 10 to 80 per cent which is nothing but a "predatory pricing".

Moreover, 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, CAIT pointed. 

CAIT clarified that traders are not against e-commerce business and have a firm view that e-commerce is future mode of business in the country.

But there has to be a level-playing field where there should not be any element of predatory pricing or deep discounting, it added.

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