2 States: Different States of E-commerce Regulation

Some Indian states are making e-tailers and their customers life difficult.

Times of India reports that if you live in India's most populous state Uttar Pradesh and order a new smartphone from Flipkart, Snapdeal or Amazon, it most likely won't be delivered to your home. The three online marketplaces have virtually stopped delivering products exceeding Rs 5,000 in value to customers in UP and Uttarakhand, citing harassment by tax authorities over a form that buyers are required to furnish when purchasing goods from other states. Buyers have to file a VAT declaration, along with the registration number of the vehicle bringing the products, which has to be furnished by the deliverer. The tax authorities have upped the ante to ensure it is strictly followed and have even seized goods.

"Owing to these statutory restrictions imposed by the UP government, we do customer deliveries for shipments only up to Rs 5,000, which is for interstate shipments," a Flipkart spokesperson said in an e-mail. This is another instance of e-commerce companies facing the heat from states over tax issues. Karnataka proposes to impose a 1% value added tax deducted at source on all payments to dealers in the state by e-commerce firms, a move vehemently opposed by the industry.


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