Traders' body demands regulator for digital commerce

Traders' lobby CAIT on Tuesday demanded the setting up of an independent regulatory body for digital commerce for oversight and fixing accountability on e-commerce and quick commerce platforms, alleging anti-competitive practices like predatory pricing, deep discounting and exploitation of gig workers.

The Confederation of All India Traders (CAIT) also sought expeditious roll-out of the National e-Commerce Policy and e-Commerce rules under the Consumer Protection Act, both currently under finalisation by the Commerce as well as Food & Consumer Affairs Ministries, respectively, to safeguard the interests of retail traders.

It recommended the imposition of a 'luxury tax' under the prevailing GST framework on goods sold via e-commerce platforms, arguing that the practice of buying goods online be considered a 'luxury'.

Currently, goods and services tax is a four-tier tax structure with slabs at 5, 12, 18, and 28%.

"Quick commerce has now expanded to 100 cities. In metro cities, 70% of the retailers are using rented shops. Till now 10 lakh shops have been shut as per our estimates in the last two-three years. Though new shops have also opened, the number of new shops that have opened is less as compared to the number of small retail stores that have shut down due to lack of affordability and viability of operations," he shared.

The traders' body also recommended the prohibition of inventory-led operations by platforms posing as a marketplace.

As per existing rules, 100% FDI is allowed through an automatic route in the marketplace model of e-commerce. However, overseas investment is not permitted in an inventory-based model.

In the marketplace model, e-commerce entities can only provide a platform for third-party sellers and they cannot own the inventory. They also cannot directly or indirectly influence the price of the goods.

It has been reported in the past that the CCI, which works to ensure fair business practices across sectors in the marketplace, is already looking into alleged anti-competitive ways of e-commerce companies.

At a conclave organised by CAIT, traders' representatives adopted a resolution demanding "immediate enforcement of FDI and e-commerce policies and rolling out of e-commerce rules under Consumer Protection Act; imposition of luxury tax under GST on purchase of goods from e-commerce platforms; and stoppage of human right violations committed by quick commerce & e-commerce companies".

They also stated that accountability of e-commerce platforms should be fixed and banks should be directed not to discriminate their credit card usage between e-commerce and small shopkeepers in terms of offering cash back.

The resolution also adopted recommendations seeking "prohibition of inventory-led operations by platforms posing as marketplaces; formation of an independent regulatory body for digital commerce; mandatory transparency in algorithms, pricing, and seller selection; and protection and promotion of small Kirana stores and offline trade".

CAIT National President B C Bhartia declared a nationwide campaign starting May 1.

"We will not remain silent. Local trade associations in every city and state will rise to defend India's retail democracy," he said, announcing that a strategic road map will be released at CAIT's National Governing Council Meeting in Bhubaneswar on April 25–26.