ONLINE TRADE

After the billion dollar trade offer fiasco from Flipkart, it is reported that Enforcement Directorate has decided to look into the affairs of the online trade industry.  Some merchant bodies have also demanded enquiry into the dealings of the online trading companies and have even demanded banning of these activities on the plea that the retail trade shops are losing business because of the online trades!!!

I feel this argument of the traders is ridiculous. These were the same people who opposed the entry of multinational companies in the retail trade business, arguing that they will initially sell goods at throwaway prices to gag the existing retailers and once they close shops unable to withstand the competition, the MNCs will start charging high prices from the customers. Do they think that the customers are so dumb people? For a customer it is his right and privilege to buy goods he wants from a place of his choice. And if he finds a product at a cheaper price, he will definitely purchase from there. After some period, if the prices are increased, the choice is with the customer whether to buy at the increased price or not. If the MNCs (or for that matter the online trading platforms) can procure the goods at a lower price and offer the same to customers, why should the retailers be worried? They can also reduce the profit margin and offer a lower price to the customer, if they want to be in the business. Instead of doing that they cry hoarse saying that the MNCs or the online platforms are under cutting to ease them out of the business. If that be the case, the same thing should be happening with a large retailer and a small next door kirana shop, no? So it is only a question of survival of the fittest in the present world of competition. If anybody is not able to stand up to the competition, it would be better for him to give way to the others.

And I wonder what the Enforcement Directorate is going to look into in the business. The online traders do the proper billing while they effect the sales, and hence there cannot be any instance of tax evasion, I feel. And if the government machinery is going to oversee every such activity by a private party, there will not be an end to it. So I feel these people should be freely allowed to do their business, which will only be beneficial to the customers.

The Taxes department of Government of Kerala has taken a stand that all the sales done on Cash on Delivery (COD) basis by the online traders will be treated as sales taking place in the State and taxes as applicable to sale in the State has to be paid by the companies!!!! Because of this most of the companies have stopped offering the COD benefit to the customers from the State. So isn't the tax department doing a disservice to the customers from the State?