The government has asked Amazon and Flipkart to provide details of their top five sellers after brick-and-mortar trade lobby groups complained that they were in violation of foreign direct investment (FDI) norms. Amazon said it was fully compliant with the rules. Details sought from the ecommerce marketplaces include business done by top five sellers, investments and commission agreements with vendors, said people with knowledge of the matter. The Department for Promotion of Industry and Internal Trade (DPIIT) is understood to have also asked if the marketplaces are compliant with goods and services tax (GST) in letter and spirit.
The Confederation of All India Traders (CAIT) is among those that have complained to the government. DPIIT has sent two questionnaires to the ecommerce firms, seeking details of capital structure, business models and inventory management systems. “Amazon has a high bar for compliance, and we continue to comply with all applicable laws of the land,” a spokesperson said in an emailed response. “Amazon.in is a third-party marketplace where sellers offer products to customers for sale. Sellers on Amazon.in have the absolute discretion to decide what products to sell and at their prices. Amazon cannot, and does not, participate in sellers’ decision related to their products and their prices,” said the spokesperson.