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DPIIT asks Amazon, Flipkart to disclose names of top 5 sellers, capital structure, inventory details

The DPIIT has asked the cos to share their capital structure, biz model & inventory management system.

ET Bureau|
Updated: Oct 21, 2019, 06.51 AM IST
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flipkart REUTERS
New Delhi: The government has asked Amazon and Flipkart to provide details of their top five sellers, after brick-and-mortar trade lobby groups complained that they were in violation of foreign direct investment (FDI) norms. Amazon said it was fully compliant with the rules.

Details sought from the ecommerce marketplaces include business done by top five sellers, investments and commission agreements with vendors, said people with knowledge of the matter.

The Department for Promotion of Industry and Internal Trade (DPIIT) is understood to have also asked if the marketplaces are compliant with goods and services tax (GST) in letter and spirit.

The Confederation of All India Traders (CAIT) is among those that have complained to the go-vernment. DPIIT has sent two questionnaires to the ecommerce firms, seeking details of capital structure, business models and inventory management systems.

“Amazon has a high bar for compliance, and we continue to comply with all applicable laws of the land,” a spokesperson said in an emailed response. “Amazon.

ecomm-investigations


in is a third-party marketplace where sellers offer products to customers for sale. Sellers on amazon.in have the absolute discretion to decide what products to sell and at their prices.” Amazon cannot, and does not, participate in sellers’ decision related to their products and their prices,” said the spokesperson.

Commerce and industry minister Piyush Goyal on Thursday said the government would take stringent action against ecommerce companies if they are found to be violating India’s ecommerce policy in “letter or spirit.”

He also said his ministry had sent a questionnaire seeking information, and that another was being issued.

“We appreciate the initiative by the commerce and industry minister to set up an interactive platform for players to come together,” the Amazon spokesperson said. “This will help the entire ecosystem to thrive.”

CAIT has often complained against predatory pricing and discounts, along with other violations of the FDI policy, particularly during festive season, when attractive offers abound.

The likes of Flipkart and Amazon could generate up to $6 billion, or Rs 39,000 crore, in sales this festive season, according to consultancy RedSeer.

The government said it would address retailers’ complaints but avoid any knee-jerk response, ET had reported earlier.

A clarification of Press Note 2 issued last December said marketplaces are barred from selling products from sellers where they have an equity interest and from entering into deals with any brand to sell any product exclusively on their platform.

“If law has been violated in any manner, letter or spirit, strictest action will be taken,” Goyal had said. “BJP, the Narendra Modi government, are very clear that we stand with the small retailers. We will care for them and will not allow anybody to harm them.”

One of the persons cited above said the Prime Minister’s Office was monitoring the situation.

The department also wants to know if there are variations of commission agreements with sellers, the criteria for commissions and whether they are discretionary, as well as details of any associations with payment gateways. It has also sought lists and shares of controlled and uncontrolled sellers, distributors and retail price lists for preferred/controlled vendors.

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