E-Commerce has become the new norm of the day and has become an integrated part of our day to day life. You name anything, booking tickets for film, flights, trains, shopping garments, laptop or even grocery and vegetables, people use e-commerce on a day to the other. As per the latest buzz, the government has now made compulsory for the e-commerce companies including Flipkart, Amazon to submit the FDI policy compliance report by the statutory auditor by end of September on an annual basis. This was a move, which was aimed to ensure that they follow all the norms in the right way.
As per the government notification, which was issued on Thursday, the eCommerce companies now have obtained a statutory audition report by September end for preceding the financial year. As per Section 15, the FEMA or the Foreign Exchange Management Act will be dealing with this matter or the e-commerce entities. Against the SI. No. 15.2.3 for entry, the following entry should be submitted with the commerce marketplace entity with FDI, which shall gain and maintain a report of statutory auditor by 30th of September every year for the preceding the financial year confirming the compliance of the E-Commerce guidelines claimed the gazette notification.
As per the sources close to the government, this decision would help in making the FDI policy in the e-commerce sector. The move will boost up the compliance cost for these companies found in the market. This has led the trader bodies to raise concern over the violation of FDI or foreign direct investment or FDI norms. The Confederation of All India Traders has enquired the government to avoid the demands of the global e-commerce players and the US-based industry chambers to make the changes as made in the FDI or foreign direct investment norms for e-commerce.
It has asked the government to make it compulsory for the eCommerce players to obtain a compliance certificate by 31st of March to raise funds. The CAIT has usually complained regarding the predatory cost and rebates and the several other violations of the FDI policy specifically during the festive season. Earlier Mr. Piyush Goyal the Commerce and Industry Minister had warned all the e-commerce companies about the strict action if they fail to stop the predatory cost on their platforms, which is seen flouting the FDI rules. The issue was discussed by Mr. Goyal with Mr. Amit Agarwal of Amazon India last month. Now, with the Press Note clarification issued this month, the marketplaces are seen selling out the products from the vendors that carry the best equity interest. With this, the eCommerce players would fail to enter into the deals with vendors and third parties for selling out their products on their platforms. These norms are likely to come to an effect from Feb 2020.