In a letter to the Commerce Minister Nirmala Sitharaman, Confederation of All India Traders have raised concerns about “predatory pricing” strategies by e-commerce players that is causing losses to brick and mortar stores and has said that this is against the principle of fair market and fair competition.

It has urged the government to set a special task force to “probe in to the working and business module of e commerce companies” and set up a regulatory authority to monitor the e-commerce business in India.

This comes in the wake of the big sales being announced by e-commerce players.

The trade body said, “It is astonishing that same brands of large number of products are being sold at a much cheaper rate by these companies in comparison to offline market. Such tendency is causing much business loss to brick and mortar shops particularly in segments of Cosmetics, daily use items, footwear, apparels, watches, gift articles, electronics, computer hardware and software, Mobiles and its accessories, Toys, Home Furnishings, Kitchen Appliances, Sports goods, Travel Luggage and Accessories, books and many other. Jewellery is yet another segment which is also being hit due to online market.”

It added that it is surprising that even after paying the commission and shipping charges to the e-commerce companies, the online shopping is cheaper that offline markets.

The trade body said e-commerce players are also contributing to the loss of tax revenue to consuming states and this anomaly needs to be corrected. “Such Companies are registered with taxation department of one State and making deliveries of the products through their logistic arrangement in different states across the Country. They seem to pay the applicable tax to State where they are registered but the goods consuming state does not get any revenue though the basic fundamental of the VAT taxation system is that the end consumer has to pay the tax, the trade body added.

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