The Confederation of All India Traders (CAIT) has alleged that the heavy discounts being provided by e-commerce marketplaces for the festive season are burning a huge hole in the pocket of the Government.
According to CAIT, these players are levying GST on the discounted price rather than on the actual market price of the commodity.
They have sent across communication to Finance Minister Nirmala Sitharaman about their concerns regarding Amazon and Flipkart, which seem to be depriving the Government of huge amount of GST revenue.
The confederation has urged investigation and action against perpetrators.
“It is 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. However, these e-commerce companies which are authorised 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,” the CAIT statement said.
CAIT National President B.C. Bhartia said during festive sales, e-commerce companies offer a large number of products which are sold at much lesser price than the actual price thanks to deep discounts ranging from 10 to 80 per cent, also called ‘predatory pricing’.
It is an open secret that deep discounts offered by these e-commerce companies are funded by their investors and in actuality, the Government ends up losing more money than them 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.
Bhartia clarified that traders are not against e-commerce business, but want a level-playing field where there should not be any element of predatory pricing or deep discounting.