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Flipkart sues Uttarakhand Govt over entry tax
Mar '16
E-commerce major Flipkart has moved the Uttarakhand High Court against a 10 per cent entry tax in the state on goods purchased from e-commerce firms.

Flipkart filed a petition with the court in February, arguing that the state government's move to impose such a high entry tax was discriminatory. The case will be heard next week and could see other e-commerce players joining in to help maintain parity in taxation of goods bought online and offline.

“The move by the Uttarakhand government of imposing 10 per cent additional tax will negatively impact hundreds of thousands of consumers in the state, who rely on e-commerce. This additional tax is on top of the tax already paid on such goods by the sellers in the state from where the goods have been dispatched,” a Flipkart spokesperson said.

E-commerce companies have alleged that this levy, which is imposed on the courier agent delivering the goods, leads to substantial increase in prices of goods sold online since it amounts to double taxation, and said they are mulling judicial remedy individually as well as collectively.

Maharashtra, Bihar and Karnataka also have an entry tax on e-commerce goods. A few other states are also planning to follow suit.

If Uttarakhand HC rules in favour of Flipkart, experts say it could deter other states from implementing such a tax as they, too, could be sued.

Flipkart has said it is engaged with several stakeholders to urge the Uttarakhand government to revoke the additional tax on e-commerce purchases.

Several states are targeting the boom in e-commerce, a sector which facilitated the sale of goods worth Rs 80,412 crore in 2015, to drive revenues. They argue that e-commerce transactions where purchases are done within the state but the delivery originates from outside the state are leading to a huge loss in revenues.

In Karnataka, Amazon is locked in a battle with the state government over a taxation issue for 18 months now. The state had asked Amazon to pay up on behalf of the traders on its platform that evade taxes. The company shot down the proposal and discussions to resolve the issue are still on. (SH)

Fibre2Fashion News Desk – India

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