The government is working on a proper definition to bring clarity on a host of issues including taxation for e-commerce companies in view of ‘very complex’ and ‘multi-layered’ business structure of these firms.
Union commerce and industry minister, Nirmala Sitharaman said e-commerce is not a simple issue. She said state governments have given their inputs at a stakeholders’ meeting and the centre was considering defining an entire gamut of ‘what is a market place, why it is a market place, when it is portal related.’ The definition would happen soon, the minister said.
Earlier this month, the Department of Industrial Policy & Promotion (DIPP) under union commerce ministry had forwarded a complaint by Confederation of All India Traders (CAIT) against e-commerce players to the Reserve Bank of India (RBI) and the Enforcement Directorate (ED).
DIPP has requested both RBI and ED to examine CAIT’s complaint and take necessary action. CAIT alleged that e-commerce portals are circumventing the law and are engaging in Business to Consumers (B2C) activities, which is prohibited for e-commerce marketplace portals. These companies have solicited general public in to their respective sales by big advertisement campaign on print, electronic and social media.
CAIT also said that since e-commerce companies have received foreign investment, as such they are allowed to undertake B2B e-commerce activities and not Business to Consumer (B2C) activities.
