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Audit for FDI norms
Why is it in the news?
- The government has issued new rules that make it compulsory for e-commerce companies with foreign investments to submit an audit report every year, showing that they have been in compliance with the FDI rules for the sector.
More in the news
- The notification amended the Foreign Exchange Management Act, 1999, dated December 5.
- Key Notification:
(1) E-commerce companies have to obtain a statutory auditor report by the end of September each year for the preceding financial year.
(2) e-commerce marketplace entity with FDI shall have to obtain and maintain a report of statutory auditor by 30th of September every year for the preceding financial year, confirming compliance of the e-commerce guidelines.
- Existing rules pertaining to foreign direct investment in e-commerce:
(1) Vendors that have any stake owned by an e-commerce company cannot sell their products on that e-commerce company’s portal.
- Any vendor who buys 25% or more of its inventory from an e-commerce group firm will be considered to be controlled by that firm and thereby barred from selling on its portal.
Source
The Hindu.