The predatory pricing and deep discounts being adopted by the ecommerce platforms has once again been highlighted by the Confederation of All India Traders (CAIT), a body representing the offline retail traders. Having made earlier attempts to draw the attention of the Competition Commission of India and the DPIIT on the grounds of lack of a level playing field and violation of FDI rules respectively, this time, the CAIT has gone to the government claiming it is losing its GST revenue due to the practices of the ecommerce companies.

The trade body claims that in the garb of festival discounts, these online platforms are charging GST at the grossly discounted prices, thereby depriving the government of its rightful revenue.   

In a communication sent by CAIT to the Finance Minister Nirmala Sitharaman, it has been pointed out that the GST rules stipulate that the GST has to be charged on the market price and not on the discounted price. They have further complained that for a much minor infringement on their part, the authorities would have hauled them up and imposed fines, but the ecommerce companies like Flipkart and Amazon have been allowed to get away with such serious violations of the GST provisions.

They want the FM to order an investigation into the matter. They have said these companies are not even allowed to participate in any B2C trade as their licence is only for B2B. However, they appear to be indulging in selling to the consumers in blatant violation of such FDI provisions. The letter draws attention of the FM to the fact that the online platforms are currently running their festival sale offering discounts of as much as 80% on the products on their platforms.

According to CAIT, these prices are possible only if the companies bear the losses, which they appear to be doing from their financial statements year after year.  

The letter has however concluded with a statement that they also understand that ecommerce is here to stay and that they have nothing per se against them. Their only plea is that there should be a level playing field.