According to CAIT, brick and mortar shops are subject to various acts, laws, rules and regulations whereas online retail business do not have any specified rules and regulations, and thus are taking undue advantage
The Confederation of All India Traders (CAIT) has decided to intensify their fight against online shopping portals like Flipkart, Snapdeal, Amazon and eBay. As part of their fight, the traders’ body has sent letters to all chief ministers, seeking a meeting to explain the revenue loss being suffered by the states.
"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," CAIT said in the letter.
According to the traders’ body, brick and mortar shops are subject to various acts, laws, rules and regulations whereas online retail businesses do not have any specified rules and regulations, which give them more advantage to play business as per their own will and wishes.
Praveen Khandelwal, National Secretary General of CAIT said, retail traders, except online retailers are mandated to conduct business under 15 different acts. This includes Value Added Tax (VAT) Act, Central Sales Tax (CST) Act, Legal Metrology (Packaging Commodity) Act, Central Excise Act, State Excise Act, Provident Fund Act, Minimum Wages Act, ESI & Gratuity Act, Shop and Establishment Act, Consumer Protection Act, Service Tax and Cess, Income Tax Act, Essential Commodities Act, Food Safety and Standards Act and Entry Tax.
"On the other hand, 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," he said.
According to CAIT, taking advantage of the situation, online retailers are selling goods much below the actual cost under the guise of consumer benefit. It said, "In order to control and dominate the market, they (online retailers) are selling goods even at suffering the losses. But once they are able to monopolize their business, they will certainly exploit consumers 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 business is being controlled and monopolised by few online platforms. Such a scenario is certainly against the interests of consumers and established brick and mortar shops."
"Under the circumstances and keeping into consideration the protection of interests of the consumers and making the competition between equals, we urge that specified rules and regulations must be framed for conducting business activities on e-commerce portals,” the traders’ body said.