Research Areas

Research Paper on To issue a New Press Note to Clarify the FDI Policy in the E-Commerce Sector

The candid and unambiguous repeated statements made by Indian government from time to time on various national and international forums for mandatory compliance of FDI in e-commerce rules and policy both in letter & spirit by foriegn funded e-commerce companies led by Amazon & Flipkart is really commendable, but we have great regrets  that these e-commerce companies have blatantly and fiercely left no stone unturned in passing deaf ears to such policy statements and have continuously indulged in unethical & illegal activities by flouting the mandatory provisions of the FDI Policy in both letter & spirit These are not only the assumptions but have been corroborated by us in the past by submitting various credible evidences which even led the Ministry to refer the matter to the Competition Commission of India which in turn ordered an investigation in January,2020 against Amazon & Flipkart  and despite all efforts to stall the investigation by both Amazon & Flipkart, the firm stand of the CCI has been duly corroborated by a judgment of Karnataka High Court delivered on 12th June in which the learned Court observed that " It is expected that an order directing investigation be supported by ‘some reasoning’, which the commission has fulfilled" . This observation of the Court has substantiated the fact that everything is not going well and therefore, the investigation should continue.

In the light of the above said judgment and to meet the ends of justice, government must direct the CCI to immediately begin the investigations without any further delay and also request that the much awaited fresh Press Note replacing Press Note No.2 of the FDI policy be released immediately blocking all possible escape routes and avenues to dodge the policy and the law. The notion that India's laws are weak and can be manipulated either way as per the convenience must be washed away with immediate credible actions. The CAIT is not against e-commerce or any particular Company. However, we stand committed to ensure that policies, laws and the rules of the Government must be followed by one and all without any discrimination and applicable policies and the rules must be obeyed, come what may. We would like to mention that traders across the Country have been taken on a ride by these Companies and slowly & gradually are losing the confidence in the administrative system and to regain such confidence, strict steps are needed to ensure that whosoever, small or big, should not even think of violating the law or the policy. In spite of these daylight blatant violations, so far the officials and the Departments concerned have not taken any significant step to curb the mal-practices of these e-commerce companies. We have requested that stern directions may be issued to the concerned officials to take immediate steps to maintain an even level playing field as elaborated by you number of times.

Research Paper on To issue a New Press Note to clarify the FDI Policy in the e-commerce sector and take stringent action against foreign e-commerce companies violating the FDI Policy.

1.      We would like to place on record the immense pain and hardship of over 40 crore Indians who are directly and indirectly dependent on the Indian retail sector. This pain and anguish stems from the fact that despite our continuous calls for help and action against these foreign e-commerce entities, the DPIIT has not initiated any action whatsoever till date. It is becoming seemingly clear to our members and their families that the department exists solely for the purpose of serving the interests of global behemoths like Amazon and Walmart to the detriment of small merchants and Kiranas. It is shocking to see that despite the blatant violations by these foreign e-commerce entities, the DPIIT has chosen not to initiate action and prohibit these illegal activities.

2.      We requests to the DPIIT to issue a fresh/new Press Note to clarify the provisions of the FDI Policy is only intended to prohibit the continued violations of the FDI Policy at the hands of these foreign e-commerce entities who are causing grave harm to small merchants/Kiranas.  

3.      Amazon and Flipkart have been violating the FDI Policy (especially Press Note No. 2 of 2018) in various ways for a long time. However, most recently Amazon and Walmart have been at the helm of violating and blatantly disregarding lockdown measures of various State Governments across the country. It is shocking to see that even in such difficult times, these foreign e-commerce entities have continued to exploit the law and put public safety at risk. These foreign entities have been gaining undue advantage by making illegitimate gains through supplying of non-essential items which are strictly prohibited by most state administrations. In the wake of the pandemic, retail stores selling non-essential items are either not allowed or allowed to be open only for few hours daily while Amazon and Flipkart have been flouting lockdown orders by selling all kinds of non-essential goods e.g. mobile phones, electronics and kitchen appliances etc and delivering them throughout the day.

Research Paper on Relief sought under Goods & Services Tax

The second wave of COVID-19  has severely affect the trade at the time when the traders was trying to restart their respective businesses greatly suffered with first spell of Corona and due to lockdown and other covid restrictions, the traders across the Country are unable to comply with various statutory compliances under GST Act. Therefore, extension on the date of filing of various GSTR returns till August, 2021 without late fee and interest is the need of the hour. Also the Import duty on raw material required for manufacturing medicines and medical equipments may be suspended/ reduced till the time current situation is resolved. It is also requested that all the medical and surgical equipments required for covid and black fungus pandemic may also be reduced considerably.

Research Paper on Hardship while filing GST

Hardships faced by the traders due to payment made being treated as received on filing of GSTR-3B. Everyone is aware how COVID-19 has affected the entire trade not of our own country but the whole world. At this time when the trade is trying to restart and struggling for its survival, certain provisions with regard to compliance have been issued which has brought the morale of businessmen very down & made it difficult for them to do business. As it is, the volume of business is low & payments made are not being treated as received without filing of GSTR-3B.

We would like to point out that even when an assessee has made payment vide challan, the amount is not credited to his account till he files GSTR-3B. This is causing a cascading effect on his business & delayed revenue to the Govt. When the assessee knows that by making part payment, he will not get credit without filing GSTR-3B, he will not make payment unless the total amount is available with him. 

We have requested that the date of challan should be treated as the date of payment instead of date of filing Form GSTR-3B. The tax is paid through challan but the same gets set off only on filing of GSTR-3B and the interest is charged upto the date of filing of GSTR-3B even though the tax was paid through challan and balance is lying in electronic cash ledger.  This is an unjust mechanism. Therefore, it would be fair if challan date should be treated as the tax paid date and not the date on which GSTR-3B is filed and interest should be charged up to the date of challan, when it starts showing in electronic cash ledger of the assessee. This practice was followed in the pre-GST era under state VAT and under Central Excise, Customs and Service Tax. It is an accepted practice and no State should have any objection to it. Infact, it will encourage the assessee to pay tax as and when funds are available with him because he will be ensured that once the tax is paid his interest liability gets locked. Even in income tax challan the paid date is considered as the date of payment and not the return filing date.  

Research Paper on Measures to control rapid escalation of COVID pandemic

In the wake of speedy escalation of COVID pandemic in different States of the Country, the citizens of the Country and in particular, the trading community, being the first point contact with the population of India, has a greater obligation to render all kinds of services required to combat the pandemic. Driven by such a thought, we stand in solidarity with both Central and State Governments to become an extended arm of the Government for performing well any assignment that will be given to us.

A closer analysis of the covid statistics over the last one week have made it ample clear that Night Curfew and Lockdown in different States have not brought the desired results of bringing down the cases. On the 5th of April, India reported 96,563 positive cases out of which high surge states reported respective numbers-  Maharashtra ( 47,228), Delhi (3548) Gujarat ( 3160) Punjab ( 2692) Karnataka ( 5279) Chattisgarh ( 7302).Since then Maharashtra, Delhi, Gujarat, Punjab, Karnataka and Chattisgarh have all imposed various restrictions like night curfew & lockdown beginning with 5th April in Maharashtra, followed by Delhi, Gujarat and Punjab on 6th April, followed by Karnataka & Chattisgarh. As on 9th April, India reported 1,45,384 positive cases which is a 50% increase from 5th April, the day restrictions were announced. Maharashtra reported 58993 cases on 9th April which is 25% higher than the day lockdown was announced by the state government. Similarly, Gujarat (4541) & Delhi ( 8521) a steep rise of 43% and a staggering 140% respectively. States like Punjab 3459 ( 28%) Chattisgarh 11447 (56%) Karnataka 7955 ( 50%)  have also reported a significant spike despite the curbs. 

Research Paper on Unauthorised selling of pharmacy through online

The repeated violation of Drugs & Cosmetics Act by selling pharmacy through their respective e-commerce channels which is adversely affecting the business of lakh of Medicine Retailers, Chemists etc who are giving medicines to needy people by observing all provisions of the law and the rules must be stopped. 

Attention must be drawn towards some of the prominent companies clouding Pharmeasy & Medlife , owned by Dharmil Seth and investment from Temasek, 1Mg owned by Prashant Tandon, investment from Sequoia and now slated to merge in Tata Group, Netmeds, now owned by Reliance Group, Amazon and Flipkart (owned by Walmart) are indulging in selling pharmacy online. 

In this context, we wish to state as under :

1.     Mushrooming of e-pharmacy is causing huge hardships to the retail chemists and distributors in the wake of anti-competitive practices like capital dumping and deep discounting leading to predatory pricing. 

 2.    Brick and Mortar medicine resellers including retail chemists and distributors are the first points of contact for needy patients across the country. E-pharmacies with their financial backing by large foreign players/funds have started disrupting brick and mortar retailers due to the unmatched and often unsustainable pricing.

Research Paper on Necessity of a new Press Note replacing Press Note No.2 of FDI Policy 2016/2018

FDI in e-commerce section of Press Note No.2 of FDI Policy 2016/2018, the stipulations of which foreign entities like Amazon and Flipkart are hell bent on ruthlessly destroying the Indian retail sector with their deep pockets and expansive lobby of legal experts who will stop at nothing before trampling the lives of over 40 crore Indians. It is nothing less than a daylight robbery where expressive prohibitions of Press Note No.2 are grossly and blatantly are being violated by such foreign entities derived with their ulterior motives to implement their hidden agenda to control and dominate not only the e-commerce business but also the retail trade of India in a very clandestine manner. Instead of complying the stipulations of said Press Note both in letter and spirit to respect the law of the land, these foreign entities are deliberately each and every rule of the Press Note No.2 treating India as a banana republic. Under such a grim situation and particularly in the wake of current highly vitiated e-commerce business, a duty is cast upon the Government to protect sanctity of the law, rules and regulations pertaining to FDI in e-commerce and therefore necessity of a new and fresh Press Note replacing Press Note No.2 of the FDI policy is need of the hour.

In continuation to our submissions made at the meeting convened by the DPIIT on 17th March,2021, we would like to strongly add that issuance of a fresh Press Note clarifying the FDI policy in e-commerce and also notifying the restrictions imposed on marketplace in absolutely unambiguous terms so that these foreign entities are not able to indulge in inventory-based model. The loopholes of the present policy are being exploited by foreign e-commerce giants like Amazon and Flipkart so that these loopholes are properly plugged and the policy is implemented as per its original intent.

The prime reason for these violations by the foreign e-commerce giants is their lust to control multi-brand retail trade through e-commerce platforms, by controlling the sellers on the platform, thereby controlling the prices and nature of goods being sold on their marketplace. Such control allows them do predatory pricing, deep discounting, preferential treatment of sellers with capital dumping through their affiliate sellers at its root. All this is done to gain the market share and make illegitimate financial gains at the expense of livelihood of  8.5 crores small merchants, their dependent families and employees.

Research Paper on Scrapping of unnecessary compliances for ease of doing business

The Government to scrap about 6000 compliances both under central and state level laws to facilitate ease of doing business in India at a webinar for PLI is highly commendable . PM is deeply committed to enhance business opportunities for small businesses in the country by providing a cohesive and easy atmosphere for conducting business activities in the Country. The small businesses in the Country have a major role to play in attaining PM’s vision of making India, a 5 trillion economy by 2024.

We definitely align ourselves with PM’s vision and, we are of the firm view that such a step will certainly widen the tax base which in turn will yield more revenue to both central and state Governments. It is a matter of fact that the non corporate sector faces a complex system of governance framework coupled with multiple legislations thereby prescribing a plethora of statutory compliances which unfortunately leverage the scope of avoiding laws & rules thereby promoting unhealthy business practices and to large amount rampant corruption.

In this context, the current structure of the GST taxation system requires about 60 compliances at various levels to comply with GST laws and rules. These compliances and several other provisions have made the GST taxation system quite complex and complicated and prove to be a severe hurdle for ease of doing business. Unfettered and arbitrary powers given to the tax officials stand against the basic fundamentals of the widely promoted agenda of the Government for faceless assessment and faceless working of tax departments. However, we are of the considered opinion that habitual law offenders or tax evaders should be treated with exemplary punishment without any mercy but it should not be used against honest and tax compliant people. We, therefore, request your good self to review and comprehensively overhaul the GST taxation system.

Research Paper on GST

" The present state of GST" and " E-commerce"

1.  Goods & Services Tax : We recall our discussion with Late Shri Arun Jaitley prior to implementation of GST who emphatically said that the GST will end all woes and sufferings of the traders and under GST, the traders would be required only once to upload their sales statements on GST portal and rest of the things would be auto populated by the GST portal to facilitate the traders to comply with the law in a most easiest manner and would give them sufficient time to focus on growth of their businesses. However, the GST Council, due to more than 950 amendments in the past about 4 years, have made the GST as a more complicated tax system and the traders are subject to about 60 types of compliances under GST which is stoutly against clarion call of your good self for "ease of doing business". Few recent amendments in GST have given arbitrary and unfettered powers to the Government officials much against your mission statement for " Minimum Government-Maximum Governance" prescribing various huge penalties even for a small error and these amendments have created a state of 'tax terrorism' in the Countryand have put clutches to the hands of honest tax collectors as well. The principle of natural justice has been greatly violated through such amendments where the traders have been denied any sort of show cause notice or opportunity of hearing before taking any penal action. Though the GST Council has revised GST rules hundreds of times but not even a single opportunity is given traders to revise the GST returns. 

However, we fully appreciate the cause of worry of the GST Council and the Government about prevalence of "fake invoices" and siphoning of substantial revenue by some anti-trade elements. We stand in solidarity with the Government for prescribing exemplary penal action against such persons. We do not advocate for any kind of tax evasion in the Country but in reality these provisions have become a cause of threat to businesses of honest traders who are complying the law. The difference between “error" and "evasion" needs to be defined and spelled out very clearly and without any ambiguity.

Research Paper on Central Tax

          COVID-19 has affected the entire trade not only of our own country but the whole world. At this time when the trade is trying to restart and struggling for its survival,

certain Notifications with regard to GST compliance have been issued which has brought the Morale of businessman very down. Already there was no business for last 9 months

due to lock down and restrictions brought by the government from time to time, the entire business is gradually shifting to ecommerce under such circumstances, the businessman

is so helpless as how to survive with so much compliance obligations. At this time when the trade was expecting some financial aid from the Government for which we have lost hope,

the introduction of the following two Notifications has emerged as a shock:

Notification No. 01/2021 – Central Tax New Delhi, the 1 st January, 2021 & Notification No. 94 /2020 – Central Tax New Delhi, the 22 nd December, 2020:

The introduction of the above two Notifications have put clutches to the hands of honest tax payers as well. A businessman cannot be restricted from filing his returns

for any reason nor can he be deprived of the ITC which he has already paid against its inward supplies and also his number cannot be suspended without providing

him with an opportunity of hearing. He can be charged with interest and penalty, late fee for the delay which the government is already doing. If these new rules are

not withdrawn the entire Trade cycle will fail and will affect tax collection adversely. The detailed discussion on these two Notifications is made in Annexure attached to this letter.

Therefore, to encourage ease of doing business the above stated Notifications should be withdrawn from immediate effect.

Research Paper on Mandatory display of Country of Origin and Manufacturer, Seller Details on products sold on E-Commerce Portal of Amazon, Flipkart and other e-commerce portals

Legal Metrology (Packaged Commodities ) Rules,2011 and Consumer Protection (E-Commerce) Rules,2020 specifically provided that the name of Manufacturer and Country of Origin should be displayed mandatorily with each products that are being sold on E Commerce Portals.

 It has been observed that E-commerce entities conducting business in India including Amazon, Flipkart and many other such portals are highly violating the mandatory conditions spelled out in above Acts. It is a pity that particularly in e-commerce every guidelines, Rules & Regulations, Laws and policies are being flouted openly and no Department has so far take any cognisance of compliance issues resulting in to a highly vitiated and mess like e-commerce trade of India.

Rule 10 of Legal Metrology (Packaged Commodities) Rules,2011 clearly states  that e-commerce entities should  display Name & Address of the Manufacturer, Name of the Country of Origin, common/generic name of the product, net quantity, best before/use by date (if applicable), maximum retail price, dimensions of the commodity etc. This Rule was introduced in June 2017 and provided a transition period of 6 months i.e Rules were implemented from 1st January,2018 but even after a lapse of three years, the above rules are not being enforced by e-commerce companies prominently by Amazon, Flipkart etc. Failure to make declarations as above will amount to selling non-standard packages and will invite penalty under the above said Act including fine or imprisonment or both.

It is to be noted that similar obligations were imposed on e-commerce food business operators vide guidelines issued by the Food Safety & Standards Authority (FSSAI) on 2 February,2017. But such FBOs like Zomato, Swiggy etc. are not complying with the above rules.

Research Paper on GST

A compliances introduced trough amendment in GST Rules recently vide Notification No. 94/2020 and Notification No. 1/2021, the issues related to its subject wise is as follows.

i)                     The following issues which arose with the introduction of Notification No.  94/2020 date 22/12/2020 – Central Tax: