E-commence is not considered ‘trade’ under the Value Added Tax rules of the State
With Bangalore emerging as a major e-commerce hub in the country, the Congress Coordination Committee in the State on Tuesday authorised Chief Minister Siddaramaiah to resolve taxation problems related e-commerce.
E-commence is not considered “trade” under the Value Added Tax rules of the State. Moreover, e-commerce firms have been urging the government not to impose VAT on e-commerce trade.
Digvijay Singh, AICC general secretary in charge of Karnataka who chaired the committee meeting, told presspersons that the Chief Minister, who had presented nine budgets, had been asked to take steps to regulate e-commerce business in the State, particularly Bangalore. Sources said the Chief Minister had requested the Finance Department to prepare a proposal for imposing taxes on e-commerce trading in the State.
Companies such as Flipkart, Amazon and Snapdeal have been aggressively marketing products online, which has resulted in low tax realisation in the State. Over the past year, online sales of various brands of mobile phones and other electronic gadgets, apparel, footwear, books and other goods have been on the rise, primarily because of attractive discounts.
Owing to increased e-commerce trade, worried Bangalore booksellers have started lobbying for a protective law, similar to that in France to control rebates and free shipping offered by e-commerce companies.
An official in the Commercial Taxes Department told The Hindu that selling commodities online had not been regulated so far. The department had taken the initiative to regulate payment of taxes for selling goods through e-commerce. “Regulation of e-commerce is a challenge for us,” the official said.
Mr. Singh said the Chief Minister had also been asked to issue an order to facilitate the 4G connectivity in the State. The government had also been asked to launch SMART (simple, moral, accountable, responsive and transparent) governance soon.