Chapter-9: Internal Trade

Services of a Wholesaler and Retailer

 

Wholesaler:

- Role: Buys goods in bulk from manufacturers and sells them in smaller quantities to retailers.

- Services: Bulk buying, storage, breaking bulk, credit facilities to retailers.

- Example: Metro Cash & Carry providing bulk purchasing options to small retailers.

 

Retailer:

- Role: Sells goods directly to consumers.

- Services: Assortment, display, credit facilities to customers, after-sales services.

- Example: Big Bazaar offering a wide range of products and services under one roof.

 

 Types of Retail Trade

 

- Itinerants: Traveling traders who sell goods door-to-door or at markets.

- Small Scale Fixed Shops: Local stores catering to specific neighborhoods or communities.

 

 Large Scale Retailers

 

1. Departmental Stores:

   - Characteristics: Wide variety of goods, organized into departments, self-service.

   - Example: Shoppers Stop offering clothing, accessories, and household items.

 

2. Chain Stores:

   - Characteristics: Multiple outlets under centralized management, uniformity in operations.

   - Example: Big Basket operating multiple online grocery delivery outlets.

 

3. Mail Order Business:

   - Characteristics: Goods ordered through catalogs or online platforms, delivered to customers.

   - Example: Amazon India facilitating online purchases and doorstep delivery.

 

4. Automatic Vending Machine:

   - Characteristics: Self-service machines dispensing goods like snacks, beverages, and tickets.

   - Example: Coca-Cola vending machines installed at various locations for instant beverage purchases.

 

 Chambers of Commerce and Industry

 

- Functions: Represents business interests, promotes trade and commerce, provides networking opportunities, and offers business advocacy.

- Example: Federation of Indian Chambers of Commerce and Industry (FICCI) advocating policy changes for industry growth.

 

 Main Documents Used in Internal Trade

 

- Proforma Invoice: Preliminary bill of sale sent to buyers before shipment.

- Invoice: Document detailing goods sold, prices, terms of sale.

- Debit Note: Issued by a seller to a buyer for additional charges or corrections.

- Credit Note: Issued by a seller to a buyer for goods returned or price adjustments.

- LR (Lorry Receipt): Acknowledgment of goods transported by road.

- RR (Railway Receipt): Acknowledgment of goods transported by rail.

 

 Terms of Trade

 

- COD (Cash on Delivery): Payment made upon delivery of goods.

- FOB (Free on Board): Seller pays shipping costs until goods are loaded onto a vessel.

- CIF (Cost, Insurance, and Freight): Seller covers cost, insurance, and freight to the destination port.

- E&OE (Errors and Omissions Excepted): Disclaimer for unintentional errors in documents.

 

 GST (Goods and Services Tax)

 

- Concept: Indirect tax levied on goods and services at each stage of supply chain.

- Key Features: One nation, one tax; multiple tax slabs; input tax credit.

- Example: GST replacing multiple indirect taxes like VAT, service tax, and excise duty.

 

 References

 

- Ministry of Commerce and Industry, Government of India. (n.d.). GST Council. Retrieved from [https://www.gstcouncil.gov.in](https://www.gstcouncil.gov.in)

- Federation of Indian Chambers of Commerce and Industry (FICCI). (n.d.). About Us. Retrieved from [https://www.ficci.in](https://www.ficci.in)

 

This chapter provides a comprehensive overview of internal trade in India, covering wholesaler and retailer services, types of retail trade, large-scale retailers, chambers of commerce and industry, main documents used in trade, terms of trade, and the Goods and Services Tax (GST).