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More states may levy 10% entry tax e-commerce companies mull action

More states may levy 10% entry tax e-commerce companies mull action

Flipkart, on Monday, sued Uttarakhand govt for charging a 10% entry tax on goods coming from other states.

A day after e-commerce giant Flipkart sued the Uttarakhand government for the levy of an entry tax, selling goods to various states is about to get difficult for Indian e-commerce companies as more states mull levying the 10% entry tax, a report by Economic Times has said.

Currently, Uttarakhand, Bihar and Assam charge a 10% entry tax on goods bought online and coming into the state from outside. This tax is billed to the courier company, the cost of which will eventually be passed on to the customer.

According to the report, now Gujarat, Madhya Pradesh and Rajasthan are also planning to impose a similar tax.

Flipkart sued Uttarakhand filing the petition through its in-house logistics arm EKart Logistics in Uttarakhand High Court in Nainital calling the imposition ‘discriminatory’.

Now, many e-commerce companies are planning to seek justice against the levy individually and collectively, the report says.

The 10% entry tax comes at a time when the government is pushing for the passage of the crucial Goods & Services Tax to standardise the tax regime across states in the country.

The entry tax levy has been called “discriminatory”, “anti-consumer”, “against the public interest” by various participants of the industry.

The ET report quotes Sudhanshu Gupta, vice-president (business) at Patym as saying, “these kind of levies act as a major deterrent for sellers from different parts of the country who have been traditionally supplying to showrooms in the state and are now selling directly to consumers.”

Flipkart’s case is scheduled to be heard next week.

Source: http://www.dnaindia.com/money/report-more-states-may-levy-10-entry-tax-e-commerce-companies-mull-action-2189462

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