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CAIT demands probe in trade practices of e-commerce firms

CAIT demands probe in trade practices of e-commerce firms
‘How can the marketplace model companies can offer 'big sale- Diwali Sale when they are not the  owners of the inventory,’ a CAIT release said. ‘Certainly, there is some fishy which is hidden behind the scene and which needs to be unearthed to provide fair play and competition,’ it said.

In a communication sent on Friday to Commerce Minister Nirmala Sitharaman, the CAIT has demanded a thorough probe in to the working and business model of e-commerce companies. It has demanded setting up of a special task force of experts to conduct an in depth probe of working of such companies.

The traders' body has sought the investigation as to how the e-commerce companies are able to sell ‘same brand and quality of goods much cheaper than brick-and-mortar shops’.

It further said that if required, the body may lodge a complaint with Competition Commission of India, alleging that the online business is ‘indulging into unfair competition practices’.

The body has also raised a question of ‘diversion of VAT tax’ by these companies which is causing great revenue loss to the state governments.

It has asked the central government to set up a regulatory authority to regulate and monitor the e-commerce business in the country. In a joint statement, CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said that recently big advertisements appeared in newspapers for ‘big sale’ by e-commerce companies. Such companies, they said, pretend to be a marketplace.

In such model, the e-commerce companies are merely providing technology platform and ownership of the products lies with sellers registered on such marketplace platform.


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