Monday, November 30, 2020
News

CAIT urges DPIIT to penalise Amazon, Flipkart for alleged violations

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

New Delhi | Sunday, 2020 9:45:06 PM IST
The Confederation of All India Traders (CAIT) has written to the Department for Promotion of Industry and Internal Trade (DPIIT) to take action against e-commerce major Amazon and Flipkart for alleged violation of FDI and FEMA norms.

In a letter to the DPIIT Secretary, Guruprasad Mohapatra, the traders' body said: "Our association has been requesting your good office to take appropriate steps and investigate, punish and penalize the multinational companies like Amazon and Flipkart (owned by foreign multinational company 'Walmart', interchangeably used hereinafter) for the blatant violation and/or by exploitation of the loopholes of the FDI policy and Foreign Exchange Management Act."

It said the traders' body has been examining various public statements and documents pertaining to the investments made by both Amazon and Walmart and it has come to light that both these companies have been conducting their activities in blatant violation of Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA Rules).

It said that the the latest revelation by Amazon during the arbitration proceedings at an arbitration court in Singapore clearly shows its control over Future Retail.

"Amazon has equivocally claimed that it has absolute control over FRL through the shareholder agreement between Amazon and Future Coupons Private Limited," it said.

"While FCL has only 9.2 per cent equity participation in FRL, but by the way of shareholder agreement between Amazon and FCL, it has full control over FRL," it alleged.

CAIT also told DPIIT that Amazon indirectly invested around Rs 4,200 crore and took over control of More Retail Limited.

It also made allegations against Flipkart and said that it has on numerous occasions, brought to the notice of the authorities about the operation of inventory-based model of e-commerce, that is prohibited to foreign companies, by Flipkart.

"Flipkart has been controlling the inventories of the goods and services being sold on its eCommerce marketplace platform operated by its e-commerce marketplace entity named Flipkart internet services Limited. Such control is exercised through sale of goods and services through its affiliate companies, such as WS retail, Omnitech retail etc," it said.

By this way, Flipkart has been in blatant violation of FDI policy and FEMA rules, according to CAIT.

It further said that Amazon also is operating an inventory-based model of e-commerce that is prohibited to them being a foreign company.

"In view of the facts and blatant violations set out hereinabove, it is requested that your good office should promptly penalize both Amazon and Flipkart for the various violations and offences under the Foreign Exchange Management Act, 1999 and the rules/regulations framed thereunder," it said.

"Applying Section 13 of the Foreign Exchange Management Act, 1999, the monetary penalty at three times the investments that are in contravention, Amazon will be liable for a penalty amounting to over Rs 1,20,000 crores and Flipkart will be liable for a penalty amounting to over Rs 3.8 lakh crores."

--IANS rrb/sn/dpb

( 493 Words)

2020-11-22-15:50:05 (IANS)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE BUSINESS NEWS
NCPEDP pushes for hike in Union Budget a...
SpiceJet seaplane services to restart fr...
Port volumes yet to fully recovery, says...
CAIT urges PM Modi to roll out e-commerc...
GDP boost, flow cushion to strengthen ru...
Glenmark to divest select Anti-Allergy b...
More...
 
INDIA WORLD ASIA
J&K Panchayat bypolls: 64% polling for P...
7 alleged Maoists surrender before polic...
Our goal is to establish Gandhi's Ram Ra...
Educational institutions to remain close...
Cartel TikTok: Narcos post guns, drugs a...
Union Ministers Amit Shah, Narendra Sing...
More...    
 
 Top Stories
Andhra Pradesh crosses one crore Co... 
IMA offers its 3L members, 1,750 br... 
Mangaluru graffiti: Police appeals ... 
Bengal T20 Challenge: Kalighat beat... 
Joe Biden twists ankle while playin... 
Malan's 55 takes England to series ... 
Chennai Air Customs foils bid to sm... 
PM's visit to vaccine centres gets ...