E-commerce companies will now report FDI Compliance annually

Dec 07 2019 03:45 PM
E-commerce companies will now report FDI Compliance annually

The government has made it mandatory for foreign e-commerce companies doing business in the country to submit FDI Compliance Report every year. Companies have to file this report through their auditors before 30 September every year to ensure that they are following government regulations. A notification issued on Thursday said that the FDI Compliance report will have to be filed by the end of September for every financial year.

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Officials in the Ministry of Commerce and Industry say that filing reports every year will make it easier to find out whether companies are following FDI norms. However, people associated with e-commerce companies believe that this will increase their compliance costs. It is being told that merchant associations have been continuously expressing concern that e-commerce companies are violating FDI rules. Due to this, the business of retail businessmen is being affected. The Confederation of All India Traders had pressurized the government not to accept e-commerce companies and American industries not to give any relief in the FDI regulations.

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The organization had also suggested to the government that it is mandatory for e-commerce companies to obtain a certificate of FDI Compliance before the end of the financial year. Currently, three major foreign e-commerce companies in the country are Amazon, Flipkart and Club Factory. In the festive season, the government had objected to the discounts and offers given by the e-commerce companies. After that, Commerce and Industry Minister Piyush Goyal also warned the e-commerce companies that if such offers are not banned, strict action will be taken against them. The issue also came up for discussion during the meeting of Amazon India chief Amit Agarwal with Goyal on 5 November. In December last year, the government had issued a press note banning marketplace e-commerce companies from selling products of vendors in which the companies hold an equity stake.

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