Indian brick-and-mortar retailers protest for online purchases "entry tax" levied

Monday 10 March 2014 00:59 CET | News

Indian offline retailers have appealed to Commissioner of Commercial Taxes to introduce an “entry tax” for goods sold online, to ensure a level playing field with online merchants, as the growth of ecommerce in India has affected their businesses, especially in hardware and electronic devices category.

The Confederation of I.T. Association has held a meeting where over 1500 vendors came together and have protested against the “unethical pricing” offers by online retailers, as reports. They have threatened the manufacturers of boycotting their products, unless some action is taken against these online shops.

Whereas Indian ecommerce companies are looking at billion USD valuations, brick-and-mortar retailers are going out of business. Both small and large offline stores are seeing their businesses decrease.

The small offline product retailers generally double up as product service centers as well. If they boycott manufacturers, the latter will not have any service centers left to deal with. A major issue is that buyers purchase products online due to convenient rates, and acquire products from offline retailers for warranty and other services, on which brick-and-mortar retailers do not make any money.

Over the past 12 months, the protests from offline retailers have been growing stronger and stronger. In 2013, many physical store owners came together to form the “We Will Act” initiative, which appealed to consumers that they should not buy products from unethical online retailers.

Many product manufacturers like Lenovo, Toshiba, Netgear, Nikon and others have even announced that products bought online will not get any warranties as these ecommerce stores are not their authorized agents.

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Keywords: India, offline retailer, online retailer, ecommerce, entry tax, boycott
Categories: Payments & Commerce
Countries: World
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