The Confederation of All India Traders (CAIT) has filed a writ petition before the Delhi High Court, requesting that a direction be issued to the Enforcement Directorate (ED) to investigate the business model of e-tailer Flipkart.
The move comes after the traders’ body on Wednesday filed a petition in NCLAT against the Competition Commission of India’s (CCI) decision to approve the Walmart-Flipkart deal.
“CAIT has prayed that the ED has taken no steps with respect to the complaint which was filed by CAIT stating that the operations of Flipkart are in consonance with the FDI policy,” it said. The traders’ body also said it has relied on recent observations made by the CCI that there must be legal and policy intervention to ensure that the activities of e-commerce players are within the ambit of the FDI policy.
CAIT has alleged that Flipkart “in the guise of operating under a marketplace model is also actively engaged in the inventory-based model of e-commerce.” Other allegations include ensuring that 80 per cent of the sales on its platform are done through its preferred sellers and influencing the prices of goods sold on its platform.
“Their own admission before a tax authority shows that Flipkart is engaging in buying of goods which are ultimately sold on their platform. Flipkart tried to circumvent the law by routing the sales via their preferred sellers who are their affiliates. It is a clear case of what they cannot do directly, they are doing it indirectly and this goes against the teeth of any law, including FDI policy and as such, Flipkart should be liable as such,” CAIT has alleged.