The Confederation of All India Traders (CAIT) has appealed to the Finance Minister of India, Nirmala Sitharaman, to conduct a high-level inquiry to examine the act of avoidance of due tax, which is carried out by ecommerce giants, Amazon and Flipkart. The trader’s body has been reaching out to Prime Minister Narendra Modi and Commerce Minister Piyush Goyal by writing them letters about this matter.
CAIT believes that the companies are indulging in illicit business like providing huge discounts, violating the FDI norms, tax evasion, and several other unethical activities. The appeal was sent as a letter to the Finance Minister on 25th November 2019. The message had all the information about how the ecommerce giants work and how they are selling goods at a much lower price than the market value. These acts by the companies are causing colossal loss of GST revenue and Income Tax to the Indian government.
FDI and its policies are governed by the Reserve Bank of India and the Foreign Exchange Management Act (FEMA). They have also requested the Finance Minister to analyze how the platforms receive their funding.
The big GST loss. Is it?
According to the GST law, no firm or company can lower the value of any goods, and the GST has to be charged on the actual market value. The companies have been providing huge discounts on the products they offer, and the GST is charged on the discounted price. CAIT further added that the whole purpose of GST fails if the market is not fair, and the fundamentals of the fair market are not observed. This act of charging GST on lowered and discounted prices is causing huge revenue loss to the central and state governments.