Indian government to tackle e-commerce companies
E-commerce industry in India came to the lime light after Prime Minister Narendra Modi initiated demonetization by barring the 500 and1000 currency notes in 2016. When there was no enough currency in the hands, people went for online shopping using plastic money. It could be well argued out that an effort taken by the leader of the country gave for a new trend which became a habit of the country.As per an ASSOCHAM-Resurgent joint study,over 120 million customers in India are expected to shop online by this year.
India has also witnessed a stupendous deal in which the American giant Wal-Mart bought 77 percentage of shares in nation’s largest online retailer Flip kart for $16 billion.
Although the above factors remain, the condition today is not very welcoming. It was reported that the Indian government is about to tackle e-commerce companies from holding big discount sales and the decision would be implemented in the near future. The government’s move is to control the discount sales that are being offered by e-commerce companies. A draft document towards this has been issued and a new rule affecting the whole industry would be implemented.
Although the draft allows 49 percent of foreign direct investments in the industry, the document has put forward a condition that the selling products will be made only in India. According to the draft, there would be a provision to listen to customer complaints too. Moreover, it is important to note that Government is taking this decisive step at a time when multi-national companies like Soft Bank, Alibaba, Wal-Mart, Tiger Global etc. are entering the Indian market.
Meanwhile, the Reserve Bank of India, in reply to a query under RTI informed that it was illegal to carry out cash on delivery by citing the Payment and Settlement Act 2007. Earlier, National anti-profiting authority also had come up against e-commerce companies by stating that they would enquire whether these companies had made any illegal profit by looting the public by citing GST. They quoted by saying that at the time of implementing GST, the tax rate was much higher. Later, the government interfered and reduced the tax. The authority would now analyze whether this decision had been reflected in the value of the products.