The Government Is Working On The Definition Of E-Commerce  

Commerce and industry minister Nirmala Sitharaman


NEW DELHI: The government is working on the definition of e-commerce to clear the air over key issues such as taxation and foreign investment in the growing sector. Commerce and industry minister Nirmala Sitharaman said her ministry has received inputs from almost all the states on the issues related with FDI in e-commerce segment.

States give their inputs

Commerce and Industry Minister Nirmala Sitharaman said that her ministry has received inputs from almost all the states on the issues related with FDI in the e-Commerce segment. When asked whether the states are favouring FDI in the sector, she said, “Let’s see. We will at least come out with some definition of what e-Commerce is.

Discussing issues such as the definition of e-commerce and taxation

The minister on July 15 chaired a meeting of states on the issues related to foreign direct investment (FDI), the definition and taxation in the e-commerce sector. The states were asked to give their views and comments on the matter.

What is present definition of E Commerce

After the meeting, officials had indicated that the ministry would come out with a detailed clarification on the matter, as brick and mortar shops have raised serious concerns over the domestic e-Retail players. As per the current FDI policy, e-Commerce activities refer to the “activity of buying and selling by a company through the e-Commerce platform”.

Confusion in New Start-ups

“There is no clear definition as of now. It is creating confusion among new start-ups. The government should come up with a detailed definition,” PayU Money head, channel partnerships, Paritosh said.

Market place definition should be clear

Industry experts said that the government needs to define the term marketplace and also elaborate as to what constitutes retail and wholesale trading on online platforms.

Currently 100 per cent FDI permission in B2B

At present, 100% FDI is allowed in business-to- business (B2B) e-commerce and not in the retail segment.


In India, the fastest growth in Asia – Pacific

Rise in internet penetration, adoption of smartphones and lower data rates are completely changing the way India shops. International players are looking at India as it is one of the fastest-growing markets in Asia-Pacific, along with China.


E – commerce sector’s size is nearly $ 5 billion annual


According to estimates, the sector’s size is around $5 billion annually. Analysts said online shopping is expanding at a massive rate. They have alleged that e-commerce firms are violating FDI norms. On the other hand, traders body CAIT has strongly opposed any kind of relaxation in FDI in e-commerce retail.

In the absence of detailed guidelines, tax disputes have cropped up between e-retailers and some states. Sitharaman said her ministry is in discussion with finance counterpart over the taxation issues.



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