After Uttarakhand, Several Other States Consider Entry Tax on Online Goods

BENGALURU: In a stage where India is a growing hub of startups and ambitious initiatives like Startup India, some states are going against the wave of digitalization by imposing entry tax on goods purchased online. This act of several state governments has been addressed as 'discriminatory' and even 'unconstitutional' by the industry, reports ET.

The list of states includes Uttarakhand, Bihar and Assam that have already imposed an entry tax on online purchased goods as a way to increase their revenue. States like Gujarat, Madhya Pradesh and Rajasthan are also mulling the same.  This tax imposition for goods coming in from some different states is a push to the already existing tax troubles in the Indian ecommerce sector.

In protest to this tax being levied on ecommerce goods, the companies have alleged that this will result in increasing the prices where the amount of the tax will be charged by the courier agent while delivering the product to the customers.

Instead of implementing the GST, the state governments are keen to levy this entry tax on ecommerce sector to increase their revenue, said an industry official. "The decision to impose such a levy without any ostensible justification seems not to be driven by clean hands. The governments seem to be catering to various retail lobbies, which failed to stop ecommerce otherwise," the official said, seeking anonymity.

Sudhanshu Gupta, vice-president (business) at Paytm, said, "What's the point of the entire 'Make in India' if you can't sell without barriers to all the people in India?"  “These kinds of taxes are deterring the sellers to turn directly to the customers than supplying to the showrooms in the state,” he adds.

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