CAIT Demands Luxury Tax be Applied to Online Purchases

According to reports, the Confederation of All India Traders (CAIT) has demanded that a "luxury tax" be applied to all transactions made through online marketplaces. The traders' organisation suggested enforcing the levy under the goods and services tax (GST) regime, according to a media report.

The remarks were made in New Delhi at CAIT's national colloquium on the subject of "the cruel face of quick commerce and e-commerce". In order to safeguard the interests of small firms, CAIT's secretary general emeritus Praveen Khandelwal allegedly advocated for the establishment of new policy mandates to "immediately enforce" FDI laws for the e-commerce sector, especially rapid commerce.

After careful consideration, the Indian government has nearly finished draughting the e-commerce policy, according to Khandelwal. CAIT believes that in order to protect the nation's retail democracy, the time has come to enact the e-commerce policy and e-commerce regulations under the Consumer Protection Act.

Traders Body to Submit Recommendations to Ministries

The traders' group declared that it will make suggestions to the ministries of consumer affairs and commerce. These recommendations will highlight the difficulties faced by retail dealers as a result of the fast commerce platforms' explosive growth.

CAIT members claimed at the conclave that wealthy rapid commerce platforms are expanding in major cities and using aggressive discounting strategies to corrupt the retail industry. They said that small mom-and-pop store owners are being forced to close as a result of this.

Khandelwal went on to say that although rapid commerce is a brand-new industry, there is currently no regulatory framework in place. The body asks the government to establish a separate regulatory agency for digital commerce that will oversee both rapid commerce and e-commerce platforms.

 Additionally, CAIT recommended the government outlaw inventory-led online marketplace models. The Centre should also create regulations that guarantee online platforms can only offer products to final consumers through third-party vendors.

In addition, the trade association stated that its affiliate groups, including the All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors’ Federation (AICPDF), will approach the human rights commission to guarantee the "well-being" of gig workers.

In order to establish accountability and supervise e-commerce and quick-commerce platforms, CAIT has recommended the establishment of an independent regulatory authority.

Quick Commerce Changing the Dynamics of Online Shopping

The development occurs at a time when rapid commerce platforms have revolutionised online shopping in India by establishing new standards for convenience and speed.

In fiscal year 2023-24 (FY24), the three fast commerce majors—Zomato-owned Blinkit, Swiggy Instamart, and Zepto—recorded a combined top line of $1 billion. While Amazon, Nykaa, and Myntra are also testing similar products, e-commerce powerhouse Flipkart also entered the rapid commerce space last year with Minutes.