The Department of Industrial Policy and Promotion (DIPP) has issued a notification clarifying FDI guidelines with regards to E-commerce in India.
The Note contains definitions of E-commerce, E-commerce entity, Inventory-based model E-commerce, Marketplace based model of E-commerce and specifies what the marketplaces are allowed to do with regards to FDI. To view the Notification, click here.
Retailers Association of India has been representing to various state governments in regard to the 365 days store opening permission. After various meetings with the officials of the state governments, the government of Maharashtra and Tamil Nadu has issued notifications with respect to permission for keeping the retail stores open 365 days a year.
Please find the Maharashtra notification attached here.
Please find the Tamil Nadu notification attached here.
Retailers Association of India (RAI) has been working with Government of Maharashtra to create a retail policy for the state. On representation by RAI, the Government of Maharashtra unveiled Maharashtra Retail Trade Policy. This is the maiden retail trade policy for the state.
The policy was announced by Honorable Chief Minister of Maharashtra, Shri Devendra Fadnavis on 15th February 2016 in Mumbai during Maharashtra Investment Seminar (Make in India Week). Hon Industries Minister of Maharashtra – Shri Subhash Desai, Hon Chief Secretary of Maharashtra – Shri Swadhin Kshatriya, Hon Principal Secretary of Industries, Maharashtra – Shri Apurva Chandra and Hon Development Commissioner of Industries, Maharashtra – Shri Surendrakumar Bagde were among the government dignitaries present during the launch of the policy.
Shri Fadnavis handed over the policy to Retailers Association of India in the presence of eminent RAI members - Shri B S Nagesh and Shri Kumar Rajagopalan of Retailers Association of India, Shri Jamshed Daboo of Trent Hypermarket, Shri Krish Iyer of Walmart India and Shri C P Toshniwal of Futuregroup. The policy will be valid for five years from the date of notification and aims to revolutionise ease of doing business in the state, encouraging retailers to invest in the state.
All retailers have welcomed the policy, acknowledging it as a memorable occasion for entire retail industry and a great initiative undertaken by the Maharashtra State Government to provide retail with an industry status.
To download Retail Trade Policy, Click here
Retailers Association of India (RAI) has been working with Government of Andhra Pradesh (GoAP) to create a retail policy for the state. On representation by RAI, the GoAP unveiled Andhra Pradesh Retail Trade Policy. This is the first retail policy to be launched for any state in Independent India.
The policy was announced by Honorable Chief Minister of Andhra Pradesh, Shri N Chandrababu Naidu on 11th January 2016 at Vishakhapatnam. Shri Naidu handed over the notification to Retailers Association of India in the presence of eminent RAI members Shri Kishore Biyani of Future Group, Shri Neel Raheja of K Raheja Corp, Shri Krish Iyer of Walmart India, Shri Vishak Kumar of Aditya Birla Retail Ltd and Shri Alok Dubey of Arvind Lifestyle. The policy will be valid for five years from the date of notification and aims to revolutionise ease of doing business in the state, encouraging retailers to invest in the state. All retailers have welcomed the policy, acknowledging it as a memorable occasion for entire retail industry in India. Shri Kishore Biyani stated, "Andhra Pradesh's Retail Trade Policy is a new beginning and a good start for the retailers."
To download the Notification and Retail Trade Policy, Click here
The Department of Forests, Ecology and Environment, Government of Karnataka issued a notification dated 28th October 2015 that seeks to ban numerous plastic products including plastic carry bags. (Read the notification here)
There are various interpretation issues with the notification and ambiguity with regard to its applicability. RAI is working towards getting clarity on the issue, and has submitted a representation to the Principal Secretary, Ministry of Forests, Ecology and Environment, Government of Karnataka. To read the submission in detail, please click here.
The Maharashtra VAT department had issued a trade circular {VAT/AMD-2015/1C/4/Adm-8} stating asking all dealers who are liable to pay tax to discontinue issuing invoice, bill, and cash memo on thermal paper.
Instead, they were asked to use normal paper for bills so that the bill and the matter printed thereon shall last for at least eight years.
(click here to download the circular.)
In response to the circular, RAI submitted a representation to the Commissioner of Sales tax, Maharashtra recommending that Electronic bill or Thermal Invoice be allowed as a valid invoice instead of making usage of normal paper compulsory. The purpose of this representation was to convey a practical difficulty faced by retailers and the general business community. The intention is to simplify things for retail community, keep up with the changing business scenario and also care for the environment. Read the representation here.
Pushing ahead with major reforms, the Central Government has relaxed foreign investment rules in the country and eased the process for approval of FDI in Single brand retail trading, Wholesale (Cash and carry) trading and Indian brands manufactures. The idea of the reforms is to ease, rationalise and simplify the process of foreign investments in the country thus routing more FDI proposals on automatic route instead of Government/approval route.
Some of the highlights of the recent reforms are:
Knowing how the earlier FDI regulations were hampering business of Indian retailers, RAI had submitted a few suggestions through representations to the Central Government. Most of them have been accepted in the current round of reforms. To view/download the representations. Click here.
RAI delegation had a meeting with the Government of Karnataka under the Chairmanship of Honorable Minister for Large & Medium Industries and Tourism - Shri R V Deshpande on 2nd September 2015 and submitted the draft retail trade policy for the state of Karnataka. The meeting was also attended by various cabinet secretaries of the state.
Key highlights of the draft retail trade policy for Karnataka were presented to the government officials in attendance at the meeting. The draft policy not only addresses the major concerns of the retail fraternity but will also help in seeking growth in business thus taking retail trade to a new high.
Please find the minutes of the meeting here.
We would like share with you a favourable update. The Honorable Delhi Government has passed a ruling today on the petition filed by the All India Footwear Manufacturers & Retailers Association (AIFMRA), which is a step in the right direction towards bringing clarity and parity on Foreign Direct Investment (FDI) in retail.
AIFMRA, the apex footwear industry body, had filed a petition in the Delhi High Court seeking clarity on FDI in e-commerce as it feels that marketplaces are in violation of the existing norms that forbid FDI in retail. In the petition, AIFMRA argued that the sales made by online marketplaces have a full character of a sale to a consumer akin to that in retail. Marketplaces are obviously retailers because the payment is accepted by them, delivery is made by them, returns are taken by them and refund are also made by them. Hence, FDI in marketplaces too should be looked at severely.
The hearing on this matter took place on today, wherein the court after noting the FDI policy, considering the taxation angle and hearing the arguments observed that there has been "a prima facie violation". Furthermore, it ordered the Government of India to file a reply in two weeks.
Welcoming this directive, Kumar Rajagopalan, CEO, Retailers Association of India, the apex body of retailers in the country said, "RAI has consistently represented to the government that e-commerce marketplaces are utilising FDI funds, dealing with customers and behaving exactly like consumers. We have sought the Government's help in clarifying the situation as FDI rules cannot be applied differently to the so-called e-commerce marketplaces while retailers are not allowed to get FDI. The e-commerce marketplaces have been behaving like retailers-they have been pricing products and have also been advertising themselves as online retail companies. We, at RAI, have been requesting the government to frame a policy that would create a level-playing field for retailers across all channels. And this directive might help setting the ball rolling in that direction."
We would like to bring your attention to the Maharashtra State Government notification dated 1 August 2015 that dealers with turnover of not less than INR 50 Crores shall only be liable for registration.
Subsequent to this announcement, RAI requested the state government to clarify the determination of turnover i.e., whether turnover within the Municipal corporation area is to be considered or turnover in relation to the business of the dealer within the entire State of Maharashtra.
In this regard, the Government has clarified that the turnover of the dealer within the Municipal corporation area is required to be considered as per Notification No. LBT. 2015 / C.R. 42 / UD-32 dated 15 September 2015 and not the turnover for the entire State of Maharashtra.