Government asks e-commerce companies to submit FDI compliance report annually
New Delhi, December 6 () The government has made it mandatory for e-commerce companies such as Amazon and Flipkart to submit a report of compliance with FDI policy by the legal auditor before September 30 of each year, a measure aimed at ensure that they follow all the rules correctly.
According to the government notification issued on Thursday, e-commerce companies must obtain a legal audit report by the end of September of the previous fiscal year.
Section 15 of the Currency Administration Law (FEMA) deals with e-commerce entities.
Against Sl. No. 15.2.3, for entry (p), the following entry will be replaced, namely: (p) the e-commerce market entity with FDI must obtain and maintain a report from the legal auditor before September 30 each year for the previous financial year confirming compliance with e-commerce guidelines, said Gazatte's notification
According to government sources, this decision will help ensure compliance with FDI policy in the electronic commerce sector.
The measure will increase the cost of compliance for such companies.
Commercial agencies have been expressing concern about the violation of direct foreign investment (FDI) standards.
The Confederation of All Merchants of India asked the government not to give in to the demands of global e-commerce players and the chambers of American industry to modify recent changes made to the direct foreign investment (FDI) standards for electronic commerce
He asked the government to make it mandatory for e-commerce companies to obtain a certificate of compliance before March 31 in order to raise funds.
CAIT has often complained about predatory prices and discounts, along with other violations of FDI policy, particularly during the holiday season.
The Minister of Commerce and Industry, Piyush Goyal, warned e-commerce companies of strict actions if they do not stop abusive prices on their platforms, ignoring the rules of FDI.
The problem was in a discussion Goyal had with Amazon India chief Amit Agarwal on November 5, sources said. A clarification of Press Release 2 issued last December had prevented markets from selling products from suppliers in which they have a shareholding. Nor can they make deals with any brand to sell products exclusively on their platforms. These regulations became effective in February. RR DP HRS