After a standoff with authorised offline retailer of brands like Lenovo and Dell regarding low price-points, now the Kerala government has put roadblocks in the path of e-commerce companies dispatching shipments to Kerala. The sales tax department in Kerala doesn’t allow companies like Flipkart, Snapdeal and Amazon to sell in the state without paying sales tax.
Following the state government’s move, e-commerce companies have stopped taking orders from Kerala. “We are not taking any order originating from Kerala as we need to pay such taxes,” says an online seller who sells on various marketplaces.
Meanwhile, Kerala is not the only state which charges sales and other taxes. States like Maharashtra, Bihar, Orissa, Assam, Rajasthan, Arunachal Pradesh, Himachal Pradesh and Jammu & Kashmir charge taxes from e-commerce companies too.
FedEx, a leading courier service, has released a checklist pertaining to taxes for the e-commerce companies. Arunachal Pradesh, Himachal Pradesh, Jammu & Kashmir among others charge entry taxes from consignee while Bihar and Maharashtra levy VAT and Octroi taxes respectively.
These taxes vary from two to five percent in all the above states. Besides the above states, Gujarat has also asked sellers listed on online marketplaces to give them a copy of the invoice. “On readymade apparels like saree and salwar or any stitched garment, the Gujarat government is charging five percent as exporting tax from the state,” adds a Ahmedabad-based seller.
This standoff between e-commerce companies and the state government is not a new issue. E-commerce companies have been asking for an uniform tax structure across the country, which seems unlikely to be sorted out soon.
We asked a few e-commerce companies, including Flipkart to know whether they are in talks with the Kerala government to sort the issue. Responses from these companies are awaited, and we will update the post once we receive their response.
Since the new government had taken the seat at the Centre, e-commerce companies are awaiting a decision on tax structure and FDI. The BJP led government had promised speedy remedies of issues pertaining to business, and e-commerce entrepreneurs are hoping the issue will be resolved soon.