9 December , 2019 Fdiindia
Now E-Commerce Firms to File FDI Compliance Report Annually
In a step aimed at ensuring companies follow all rules and regulations relating to foreign direct investment, the government has made it mandatory for e-commerce companies like Amazon and Flipkart to file a FDI compliance report by statutory auditor by September 30.
According to the government notification, e-commerce firms are obligated to submit a foreign direct investment compliance report by September end for the preceding financial year. This announcement came on Thursday.
Section 15 of the Foreign Exchange Management Act (FEMA) deals with e-commerce entities.
The gazette notification read “Against Sl. No. 15.2.3, for entry (p), the following entry shall be substituted, namely-(p) e-commerce marketplace entity with FDI shall have to obtain and maintain a report of statutory auditor by 30th of September every year for the preceding financial year confirming compliance of the e-commerce guidelines.”
Government said that this new development will ensure that e-commerce companies stick to all foreign direct investment norms. This movie is definite to raise the compliance cost for such firms.
There have been raising concerns by trader bodies over violation of foreign direct investment norms and regulations.
The Confederation of All India Traders had requested the government to not give in the demands of e-commerce giants and American industry chambers to amend recent reforms made to the foreign direct investment norms for e-commerce.
The CAIT had previously complained about predatory prices and discounts by e-commerce global players, particularly during the festive season.
E-commerce companies were warned with ‘strict action’ by the Commerce and Industry Minister Piyush Goyal if they did not stop their predatory pricing on their platforms.