There has been a move to ‘regulate’ e-commerce market place. E-comm players are blamed for deep discounting and predatory pricing’. There is a ‘loud suggestion’ (read political pressure) for discontinuation of ‘cash on delivery’, an e-commerce ombudsman, and localization of data. Some of the e-commerce giants have been summoned and asked to share data on Sellers, GST compliance and compliance to the ‘spirit’ of FDI. Shortfall in GST collection is being attributed to such low pricing.
My understanding is that the consumer is the God of the market and not the trader, e-commerce or brick and mortar. The consumer is free to decide from where they make their purchases; they will obviously head to the best price and delivery. E-commerce does not have establishment costs; they provide door-to-door delivery, create jobs and have efficient supply chain models. Most of all, it is the choice of the educated and empowered millenniums.
Some of the big e-tailers have decided to set up ‘brick and mortar’ shops, taking the battle to the doorstep of the traditional market.
The ‘Draft Social Security Law’, is closely looking at ‘gig workers’ and ‘platform workers’. The government will try to cover these two categories, like the ‘gig workers’ of Ola, Uber Drivers and the Zomato, Swiggy ‘platform workers’ by extending social benefits, like insurance, PF etc. Thereby adding to delivery and compliance cost. Not to mention that there is an existing Act, ‘Unorganized Workers Social Security Act 2008’, under which the UPA government had set aside Rs.1, 000 Crores and the same has now been returned to the Finance Ministry.
The recent OECD proposal to tax multinationals, especially the big internet companies, is more or less, in line with India’s proposal on taxation of digital companies. There is a ‘Profit Attribution Rule’, read with ‘Significant Economic Presence’ that would impact the global digital companies operating in India. This will be applicable even where they do not have a single employee, or a permanent establishment or even an office in India.
The GST regime has decided to deny refunds to back office entities of MNC’s, terming this as ‘non-export’ and hence service to the same entity. The cost impact of this, as compared to companies based out of Philippines and Eastern Europe, could lead to contract migration out of India and hence job losses.
The GST regime has also directed large companies to put a value on logos and brands being used by subsidiaries and charge a fee with an 18% GST.
Under law governing evidence, confidential communication between a lawyer and client is protected from extraction as evidence. A lawyer is mandated to be a keeper of confidential information. A recent move by the investigative agencies to express judgment about the quality of legal advice is a serious breach of confidentiality. Imagine advising on ‘efficient taxation’ or ‘governance’! Of what relevance then is the NDA?
Who is eventually gaining from ‘predatory pricing’? The consumers! Who is subsidising this? Who cares!
Did someone mention that India has slipped 10 places to 68th on Global Competitiveness Index?
