Centre to Hold Parleys with States on E-Commerce

In the absence of guidelines, tax disputes have cropped up between leading e-retailers and some states

The Modi Government will in early July hold discussions in New Delhi with State governments to seek views on a policy for business-to-consumer e-commerce. Commerce and Industry Minister Nirmala Sitharaman will hold the discussion.

There is a variety of views about all that is going into running e-commerce operations including logistics, running of warehouses and the interface with the consumer. “The Centre’s efforts will be to evolve a consensus on all these issues,” a top Commerce Ministry source told The Hindu.

Last month, Ms. Sitharaman had held similar discussions with various stakeholders including e-retailers such as eBay, Flipkart, Snapdeal and Amazon, who made a case for allowing 100 per cent foreign direct investment (FDI) in the retail segment. At present, 100 per cent FDI is allowed in the business-to-business e-commerce space, which allows global retailers to operate cash-and-carry business in India.

There are no guidelines for operating e-commerce retail business. e-retailers such as Flipkart and Snapdeal are currently operating in the absence of rules, which, traditional brick and mortar stores’ have alleged, has altered the level playing field for them and is thus resulting in a loss of market share for them.

In the absence of guidelines, tax disputes have cropped up between leading e-retailers and States such as Karnataka, Tamil Nadu and Maharashtra.

“The discussion with the States is aimed at finding out their views on e-commerce and to assess if it is affecting the level-playing field of the brick and mortar stores,” the source said.

The Retailers Association of India (RAI), have dragged the Centre to Delhi High Court alleging that e-commerce firms have attracted FDI through the “so-called marketplace model”, which is a misnomer for actual retailing. The court asked the Centre last month to consider the RAI’s plea and come out with guidelines for the sector within four months.