Delhi HC's notice to govt on e-commerce FDI status

29 Sep '15

2 min read

There's another twist to FDI in retail. The Delhi High Court has observed that if the central and state governments were not treating e-commerce sites like Flipkart and Amazon as retailers for foreign direct investment (FDI), they cannot be treated as retailers for taxation purposes.

Justice Rajiv Sahai Endlaw said that if governments were treating transactions by e-commerce sites as retail sale for tax purposes, then how could they say these firms are not retailers for receiving FDI.

The observation by the court came while hearing a plea alleging that e-commerce sites are violating FDI policy by retailing goods through Internet.

The plea was filed by an association of footwear makers and retailers which has contended that though FDI is prohibited in retail, “entities retailing goods through the Internet are not being restrained from accepting foreign investment". The association told the court that the e-commerce sites are being treated as retailers for the purpose of tax,

The court has also issued notices to the Centre, Delhi Government, RBI and the Enforcement Directorate, seeking their replies on the plea by the association.

Current government regulations allow for 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail. (SH)

Fibre2Fashion News Desk – India

More Textiles News - India...