Industry Groups Urge Government to Implement Luxury Tax on E-commerce Purchases Under GST

Focusing attention on how online commerce firms are controlling markets, disobeying rules and precisely breaking up small retailers for their profit, keeping the other traditional existing retail sector in blockade.

The industrial authority has implemented a luxury tax under Goods and Services Tax (GST) on the purchase of goods through e-commerce platforms.

The Chairman of the All India Mobile Retailers Association (AIMRA) criticised Amazon and Flipkart, saying they have broken the rules several times and taken advantage of gaps in India’s laws for over ten years.

He concentrated attention at the national gathering on ‘cruel face of quick commerce and ecommerce’ conducted at the Constitution Club, New Delhi, by saying “Using a maze of group entities and preferred sellers, these companies bypass foreign direct investment (FDI) restrictions to dominate every layer of the supply chain while sidelining Indian retailers.”

Asked for quick implementation of Foreign Direct Investment (FDI) and e-commerce policies and introducing the ecommerce rules under the Consumer Protection Act, the Confederation of All India Traders (Cait), in collaboration with All India Consumer Products Distributors Federation (AICPDF), Organised Retailers Association (ORA) and All India Mobile Retailers Association (AIMRA).

Controlling the aggressive algorithm-driven consumer controlling and the careless use of Foreign Direct Investment (FDI) for haunting pricing, the Secretary General of Cait, blamed these platforms for assuming India is like a banana republic where laws are primary and business goals are secondary.

He stated, “Instead of creating infrastructure or supporting the retail economy, FDI is being used to finance losses, destroy small shops, and capture control over the supply chain.” The Secretary General further added to him that this is no more trade now, it is a race of valuations and the small retainers are the casualties.

All Over Country Campaign From May 1

The president of Cait has announced an all-over-the-country campaign, starting from May 01, 2025, in order to fight back against big online companies taking over the retail market. The president stated, “We will not remain silent. Local trade associations in every city and state will rise to defend India’s retail democracy.” He has informed that a planned blueprint will be introduced at the National Governing Council Meeting of Cait in Bhubaneswar, scheduled to be held from 25 to 26 April.

Worry Over Quick Commerce

Claiming that platforms such as Zepto, Blinkit and Instamart have gained Foreign Direct Investment (FDI) for more than Rs 54,000 crore. However, only 2.5% has been utilised in infrastructure. Maximum has been moved towards loss funding, subsidised services for a few demanded sellers, said AICPDF’s President.

He warned, “They are not marketplaces, they are inventory-led companies operating in disguise.”

The gathering made the conclusion of adopting a powerful Policy Resolution, with a demand to restrict inventory-led operations by platforms that pretend to be just marketplaces and are asking for a separate regulatory body to oversee digital commerce. They also want clear rules about how platforms use algorithms, set prices, and choose sellers, along with better support and protection for small Kirana stores and offline businesses.