CAIT Calls For Levying Luxury Tax On Ecommerce Purchases

The Confederation of All India Traders (CAIT) has reportedly called for levying a “luxury tax” on all purchases made via ecommerce platforms. 

As per Livemint, the traders body proposed imposing the tax under the goods and services tax (GST) regime. The comments came during CAIT’s national conclave on the topic “cruel face of quick commerce and ecommerce” in New Delhi. 

CAIT’s secretary general emeritus Praveen Khandelwal reportedly called for instituting new policy mandates to “immediately enforce” FDI policies for the ecommerce sector, including quick commerce , to protect the interests of small businesses.

“The Indian government has almost prepared the ecommerce policy after much deliberation. We feel now is the right time for both the ecommerce policy and (ecommerce) rules under the Consumer Protection Act to be implemented to safeguard the retail democracy in the country,” said Khandelwal. 

The traders body announced that it will submit recommendations to the commerce and consumer affairs ministries regarding challenges faced by retail traders due to rapid expansion of quick commerce platforms.

At the conclave, CAIT members alleged that deep-pocketed quick commerce platforms are distorting the retail market through excessive discounting tactics and expansion in major cities. This, they said, is forcing small mom-and-pop store owners to shut shop. 

“It’s (quick commerce) an entirely new sector, but there is no regulatory framework yet. We request the government to also form an independent regulatory body for digital commerce to cover both ecommerce and quick commerce platforms,” Khandelwal added.

CAIT also urged the government to prohibit inventory-led online marketplace models, adding that the Centre should formulate policies to ensure online platforms can only sell goods to end customers via third-party sellers. 

Alongside, the traders body said that its affiliate organisations such as the All India Consumer Products Distributors’ Federation (AICPDF) and the All India Mobile Retailers Association (AIMRA) will approach the human rights commission for ensuring the “well-being” of gig workers.

As per a report in The Pioneer, CAIT also called for setting up an independent regulatory body to fix accountability and oversee ecommerce and quick commerce platforms. 

The development comes at a time when quick commerce platforms have disrupted how Indians shop online by setting new benchmarks for speed and convenience. The three quick commerce giants – Zomato-owned Blinkit, Swiggy Instamart and Zepto – clocked a cumulative top line of $1 Bn in the fiscal year 2023-24 (FY24).

Meanwhile, ecommerce giant Flipkart too joined the quick commerce fray last year with Minutes, while the likes of Amazon, Nykaa and Myntra, too, are piloting similar offerings.