Kerala financial minister to look into online issue

By Subarna Talukder - 13 December, 2013

In his Pre-Budget consultation K M Mani, financial minister of Kerala has promised AKITDA to look into the online issue personally. The spate in online market has drastically reduced local sales in offline stores. In a pre-budget consultations called by the financial minister on 7th December 2013, AKITDA raised an issue of threat from online business.

The Pre-Budget consultation is intended to call representatives from industries, traders, media etc. to listen to their grievances and issues that they face in their respective fields. The representatives are expected to offer solutions to these problems which they expect from the government in the next budget planning.

Stakeholders are also expected to suggest areas for augmenting and mobilizing State's own revenue through taxes and non-tax sources. AKITDA elaborated on the benefit earned by online stores by selling IT products. Online stores do not bear VAT which amounts to 5% of the goods' price. VAT is earned by state governments on goods within sold within the state territory. This amounts to a considerable loss of revenue of the state government.

As Toshy Mathews, treasurer, AKITDA explains, "Online stores are exempted from VAT and hence their goods are already priced at 5% less than what channel partners have to offer." This renders them helpless as in no way offline stores are being able to offer a competitive price in comparison to what online stores offer. Mathews further explains, "Online stores have nothing to bear when it comes to establishments. They do not maintain a store. They do not have service support like us." He also complains that online sites buy products via grey channels. They often buy directly from vendors or imports from manufacturing sites. Hence the low price of IT goods.

 

1Comment

Post a comment

Comments 1 - 1 of 1

ASHIQ RAIDIUM Sat Dec 14 at 12:28 AM

ANY MOVE TO CONTROL THE ACTIVITIES OF ONLINE SHOPPING SITE IS NOT A LEGAL AND FAIR WAY.ONLINE SHOPS ARE A WORLDWIDE OPTION FOR CONSUMERS TO GET ANY THING WITH LOWE PRICES FROM A PENCIL TO AN BUSINESS JET OR EVEN A ISLAND. THE ONLY OPTION IS TO MAKE THE PRICE FIXING AMONG RD-ND-STOCKIST-RETAILER-SI WITH STRICT MOP .BUT MANY ONLINE SHOPS BUY STOCKS AS MUCH AS A WHOLE STATE DEALERS BILLS ON A MONTH, AND THESE HEAVY STOCK TRANSFER ALSO MAKES THEM TO GET PRODUCTS WITH MUCH LOWER PRICES.THESE ONLINE VENDORS RAISE MILLIONS OF RUPEES AS FDI AND THESE MILLIONS DOLLAR INVESTMENTS ALSO DRAWS THEM TO GET LOWER PRICES FROM RDS OR NDS AS THEY GETS BULK ORDERS WITH CASH IN CARRY OR OTHER CASH TRADE OPTIONS.THESE KIND OF THINGS IS NOT A POSSIBLE OPTION FOR A SHOP RETAILER AND MAKES THE DIFFERENCE BETWEEN THE TWO TYPE VENDORS. THE BEST SOLUTION IS TO GET STRICT MOP AMONG ALL TIER VENDORS , BUT AS THE MARKET NARROWS DOWN VENDORS WILL STILL CONTINUE TO OFFER DISCOUNTS TO THESE LARGE VOLUME BUYERS AND THESE INVENTORIES CAN BE SOLD NATIONWIDE VIA ONLINE SALES BUT THESE THINGS ARE NOT A POSSIBLE OPTION FOR AN SHOP VENDOR. SO MAKING ANY RESTRICTIONS IN TERMS OF TAX, PRICE, SERVICE ETC ON ONLINE VENDORS IS NOT A LIABLE WAY TO END THE CURRENT CRISIS.

Reply

Comments 1 - 1 of 1

Disclaimer

The views expressed in the comments above are those of our users and do not reflect the views of The DQ Week or CyberMedia.

Post a comment

Notify me of follow-up comments via e-mail address

Submit Comments

The DQ Week National Supplement

ad

Poll

The DQ Week poll

Which of the following you prefer to follow for getting regular technology news?