Government facing huge GST revenue loss due to Flipkart, Amazon - CAIT

According to news reports, Confederation of All India Traders (CAIT) has levelled charges of causing GST revenue loss to both Central and State Governments by their predatory pricing practices against e-commerce companies, Amazon and Flipkart.

CAIT wrote to Nirmala Sitharaman alleging Amazon and Flipkart of selling goods at much below the market value and denying the Government its due legitimate GST revenue.

The traders body letter quoted, “E-commerce portals particularly on Amazon and Flipkart offering deep discounts ranging from 10% to 80% is being given by them on different products, which is quite abnormal and generally not available in offline market and thereby the sales are made on a much lower price than the market value of the product and as such the GST is charged by them on the sale price.”

CAIT has also raised concerns on the issue that e-commerce firms are only liable to one-fourth of GST after selling goods at a 70% discount rate. The letter quoted, “By lowering the price artificially to capture the market, these e-commerce companies are causing huge loss of GST revenue to the Government and violating the FDI policy of the Government”.

In fact, CAIT has also urged the Finance Minister to institute a probe into this business model and recover the difference of GST between billed price and market value from the period of implementation of GST.