Take action against e-commerce firms flouting laws, seeks RAI

It said that government is taking unusually long time to come out with proper laws related to retail and FDI in retail

The Retailers Association of India (RAI), an organization of retail companies in the country, has said that it has urged the Union finance ministry to take action against the e-commerce companies which are flouting various laws in the country to offer discounts. 

"The government is taking unusually long time to come out with proper laws related to retail and FDI (foreign direct investment) in retail," said Kumar Rajagopalan, chief executive officer of RAI.

Speaking to reporters in the sidelines of the Chennai Retail Summit 2016, organised by RAI, he said that some of the e-commerce companies are flouting tax laws and ethical trade practices to make money and the industry is looking at government for action against such issues.

"The finance ministry has to take a few steps. The enforcement directory is under the finance ministry. We have met up with people there and I think they have all the information they needed. I hope that they will take action at some point in time," he said.

"We don't want to close down any business, but we want ethical business to happen. More importantly, we want the level playing field to happen. We want the consumers to flourish, but it should not be at the cost of flouting the trading norms of this country," he added.

He said that the e-commerce is also e-tailing and it is not different from retailing. The government has to come out with one policy for retail and one policy for FDI in retail. Some of the e-commerce companies who has not raised FDI investments, are also with the association.

The FDI policy is prepared in bits and pieces. The retail is not recognised as an industry although we have more than 40 million people working in it.

Goods and services tax can be a big support for retail, which can bring in 2 per cent back into the profits of many of the retailers in the country.

The dialogue with the current day government is much easier than any time in the history of India. It is also to the competitive way the states are taking these issues, which is encouraging the sector, he added.

The FDI laws in the country have been created as in there are two types of retail - FDI lead and non-FDI lead retail. Even in FDI lead retail, there is no level playing field. For instance, the policy is that Walmart cannot come in, but Amazon is welcome.

"I think we are having a myopic view from the central government's point of view on retail. In the process some people have taken undue advantage of the situation," he said.

People have given discounts by inter-state trading. While most of the mobile phones are being sold from Karnataka to other States, but taxes of Karnataka has not gone up. The State governments are also crying foul, he added.

The government has to come out with one policy for retail and one policy for FDI in retail.

The retailers association, for the first time, is planning to conduct a trade event, Chennai Shopping Festival, in collaboration with 30 retail brands, where the customers can go to a single website to know the offers of these retailers and redeem some of the coupons from the brick and mortar stores.