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E-commerce sites have disrupted the retail sector in India
E-commerce sites have disrupted the retail sector in India

SJM calls for mechanism to regulate e-commerce entities

ANI | Updated: Feb 14, 2019 12:46 IST

New Delhi [India], Feb 14 (ANI): RSS-affiliated Swadeshi Jagran Manch (SJM) urged the government on Thursday to formulate an effective mechanism for regulating e-commerce entities which have invested crores of rupees and disrupted the retail sector.
Consumers are facing challenges in the absence of regulation on these e-commerce apps/websites, it said.
Even traders who are selling through these entities are being arm-twisted and facing unfair trade practices while dealing with these unregulated operators, said SJM all India co-convenor Ashwini Mahajan in a letter to Minister for Commerce and Industry Suresh Prabhu.
Mahajan said a recent RTI showed that the Department of Industrial Policy and Promotion has no register of e-commerce marketplaces which are permitted to run businesses as per consolidated Foreign Direct Investment (FDI) Policy.
Domestic and offshore e-commerce entities should be allowed to operate only after receipt of a registration certificate from the government. For entities with a marketplace-based model of e-commerce, having a local office in India should be made compulsory.
The SJM said an inspection mechanism should be in place to verify on an annual basis that entities with marketplace model of e-commerce have complied with all the terms and conditions of Press Note 2 (2018 Series) throughout the year.

A code of conduct for the marketplace model should be prescribed to keep it neutral.
The definition of e-commerce entity should mean an entity conducting e-commerce business which is either a company incorporated under the Companies Act 1956 or the Companies Act 2013 in which person(s) resident outside India participates in its ownership or control directly or through its subsidiaries, associates or joint ventures.
The entity could be a foreign company covered under section 2(42) of the Companies Act 2013 or an office, branch or agency in India as provided in section 2(v)(iii) of FEMA 1999.
Interestingly, the SJM said cash backs should not be allowed by group companies of marketplace entities to buyers. Suitable accounting standards and disclosure norms must be prescribed for them and a committee should be instituted to study the impact of e-commerce sector on the growth of MSMEs, local manufacturers, entities being part of Make in India and consumer welfare.
Moreover, suitable amendments should be made in the income tax laws to ensure that licence to payment gateway service providers is issued by the Reserve Bank of India. The e-commerce entities should not be allowed to remit funds outside India without deduction of tax at source on behalf of offshore retailers.
The SJM said a suitable adjudication mechanism is required to check non-compliance of various provisions of FDI policy on e-commerce. (ANI)