Tax authorities join hands to implement VAT on e-commerce

Tax authorities from Maharashtra, Karnataka, New Delhi and Gujarat are working together to make sure that online retailers pay adequate tax as their sales increase. After studying the business models of online platforms over the last six months, the tax authorities want to make sure that these online companies pay sales tax to the state of goods’ origin.

Amendment of the Maharashtra VAT Act is also being considered and once implemented, e-commerce companies will have to compulsorily share customer transaction data with the department. Since the data is in electronic form, it can be easily shared with state government servers. With the Maharashtra state authorities working on these lines, even other states are planning to consider it, so that it is easier for them to assess the number of transaction taking place on these e-stores.

Recently, the Kerala state department slapped a fine of up to Rs 54 crores on multiple online players for evasion of sales tax in 2012-13 and 2013-14. The companies that came under scanner include: Flipkart, Jabong, Vector E-commerce, which has a stake in Myntra and Robemall Apparels, which operates garments retailer zovi.com. Earlier, a raid was carried out at the Flipkart warehouse based at Dasna in Ghaziabad by tax departments from Noida and Ghaziabad jointly and the IT department imposed a penalty to the tune of Rs 23.51 crores for operational irregularities by the company.