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e-commerce

DPIIT asks e-comm marketplaces to upload FDI compliance details by Sept 30

e-commerce

The department for the promotion of industry and internal trade (DPIIT) has asked e-commerce marketplaces such as Amazon and Flipkart to upload statutory audit reports certifying FDI compliance on their websites.

The compliance reports have to be uploaded within a month time (by Sept 30), which as per ET report will cover Feb-March 2019 period. DIIPT Secretary Guruprasad Mohapatra, in a meet, communicated the decision to e-comm marketplaces.

In December last year, the govt issued Press Note 2 and asked FDI compliance certification be submitted to the Reserve Bank of India (India) whereas FEMA (Foreign Exchange Management Act) notification a month after did not mandate the requirement.

Govt had later asked RBI to include the provision in the FEMA notification.

Two months ago, commerce and industry minister Piyush Goyal had asked e-comm firms to comply with the FDI norms and submit audit reports.

The govt had also asked e-commerce firms to submit details of their shareholding, subsidiaries and business structures, among others. However, they did not comply.

Earlier, SMEs and small sellers had complained to the govt that e-commerce marketplaces are flouting regulation norms and offering deep discounts to lure consumers. The govt after mulling for long came out with new FDI regulation.

In last December, the govt had modified FDI rules for its booming e-commerce sector.

The FDI draft policy, which was implemented in February barred e-tailers from selling products via vendors in which they have equity, and from allowing sellers to sell exclusively on their platforms. It also prohibits vendors from buying more than 25% from group companies of online platforms.

In case that single vendor is selling more than 25%, then that will be considered as maintaining an inventory, which is against the FDI laws of the B2C consumer market.

Besides, the marketplaces are not allowed to influence prices directly or indirectly and have to offer a level-playing field all vendors. As per the draft norms, marketplaces cannot mandate any seller to sell any product exclusively on the marketplace.

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