We take leave to invite your kind attention to online retail business in the Country through which the State Governments all over the Country are suffering significant revenue loss on account of consumption of goods in respective States purchased through online retail platform.
Such business of online retail reflects abuse of dominance, predatory pricing, avoidance of tax liabilities, dubious funding structure and unhealthy business practices and in many cases contravention of FDI policy of the Union Government.
It is noteworthy to mention that the brick & mortar shops are subject to various Acts, Laws, Rules & Regulations whereas the online retail business do not have any specified Rules & Regulations which provide them more advantage to play business as per their own will and wishes. There can not be two opinions about having specified Rules & Regulations and Government checks on any format of business being conducted in the Country. It is unfortunate that present style of functioning of online retailers being non transparent in nature debar either Union Government or State Governments to keep a check on their business module and as such either Government can not authenticate total volume of business being generated either in the Country or in respective States.
It is further pointed out that such online retailers are registered with Tax Department of one State only and are making deliveries across the Country through either their own logistic support or Courier services. The respective Government of State in which the delivery is made remain unaware of the volume of goods being consumed in its State through online purchases and deprive them of the revenue, it is entitled for, as per provisions of respective Value Added Tax Act and other rules and regulations which govern rest of the retail trade. It is a serious anomaly which needs to be investigated and need appropriate actions and steps from the Government.
For your kind information, we are giving below a list of some of the important Acts, Rules & Regulations levied on retail trade except online retail :
1. Valued Added Tax Act.
2. Central Sales Tax Act.
3. Legal Metrology ( Packaging Commodity) Act.
4. Central Excise Act.
5. State Excise Act.
6. Provident Fund Act.
7. Minimum Wages Act.
8. ESI & Gratuity Act.
9. Shop & Establishment Act.
10. Consumer Protection Act.
11. Service Tax and Cess.
12. Income Tax Act.
13. Essential Commodities Act.
14. Food Safety & Standards Act.
15. Entry Tax.
Beside above Acts & Rules, the brick & mortar shops are also subject to various Laws, Acts, Rules & Regulations and Taxes of Local Self Government and also under obligation to comply with plethora of paper formalities. Not only this, it is further subject to number of License and Permits.
On the other hand, the online retailers are absolved of most of the above Acts, Taxes and paper formalities which certainly gives them an advantageous position in comparison to offline trade and thus creating an uneven level playing field. Taking advantage of the situation, the online retailers are selling goods much below the actual cost under the guise of consumer benefit. In order to control and dominate the market, they are selling goods even at suffering the losses but once they are able to monopolize the business, they will certainly exploit the consumer by charging high rates due to absence of any competition. We have living examples of Travel and Book Business which was conducted by large number of people in the Country few years back and now the whole such business has been controlled and monopolised by few online platforms. Such a scenario is certainly against the interests of Consumers and established brick & mortar shops.
It is also to be brought to your knowledge that Countries like USA, UK, European Union, China etc where e commerce business has attained significant growth, the E - Commerce Business is governed by specified Rules & Regulations.
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