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Govt asks ecomm platforms to upload FDI compliance reports by Sept 30

Govt asks ecomm platforms to upload FDI compliance reports by Sept 30
Photo Credit: 123RF.com

The government has asked online marketplaces to upload the audited reports on compliance with foreign direct investment (FDI) norms detailed in Press Note 2 by September 30.

Ecommerce platforms have now been asked to upload the audited reports on their websites, according to discussions during a meeting of representatives of ecommerce companies and Guruprasad Mohanty, secretary, department for promotion of industry and internal trade (DPIIT).

While the format of the reports is yet to be finalised by the department, there is likely to be no extension on the deadline, an industry representative who was part of the meeting told TechCircle.

“Audited reports with the Registrar of Companies are typically filed in a format prescribed by the Ministry of Corporate Affairs. In this case, they will have to come up with the format ahead of the deadline,” the person, who did not wish to be identified, said.

The development was first reported by The Economic Times.

Press Note 2, issued by DPIIT in December 2018, had asked the companies to file the report with the Reserve Bank of India.

Press Note 2 clarified that FDI in inventory-led ecommerce was not allowed. Online retailers reportedly form innovative structures through joint ventures and create subsidiaries to bypass this rule.

In the latest discussions, the department also indicated that it will send reminders on sharing the structure of companies and business model by ecommerce platforms. This was first decided during a meeting held by the minister of commerce and industry Piyush Goyal with representatives of ecommerce companies in June

Flipkart and Amazon India, in response, had said they were compliant with the norms and open for audit.

The current audit will only cover the period of February 2019 to March 2019 as Press Note 2 came into effect from February 1.

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