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Trader's body CAIT urged the government to investigate the violation of FDI and taxation rules by e-commerce major Flipkart, alleging that the Walmart-owned firm had "creatively" restructured its business model to exercise control over inventory and retail prices.
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Flipkart was violating FDI policy "by creatively structuring its marketplace business model and creating a facade in order to exercise control over inventory and retail prices, a practice expressly prohibited by the FDI Policy on e-commerce", CAIT said in a letter to Commerce and Industry Minister Piyush Goyal.
This warrants an immediate investigation and strict action from the Indian government, including tax authorities, Confederation of All India Traders (CAIT) added.