- Amazon India, Flipkart and their rivals could soon face tax complications with Karnataka proposing a 1 per cent levy on payments by buyers to sellers on ecommerce sites, a move that could encourage other states to follow suit.
- The planned levy, in the form of value-added tax deducted at source
- Amazon India and Flipkart have fulfilment centres in Karnataka. Goods supplied by producers are kept in these centres before being shipped to customers. The two companies also have their head offices in Bengaluru, suggesting that the bulk of their business could be impacted by any such levy
- If put in place, ecommerce companies will have to deduct 1 per cent of payments made to vendors before passing the money on, making goods costlier for consumers.
- The state says the levy will help keep tabs on the revenue of sellers, who would be able to claim credit for the tax. The authorities feel this will ensure that disclosures are accurate and companies are paying the right amount of tax, said one of the persons cited above.
- Tax experts said such a levy would increase the compliance burden on the companies.
- Taxation of ecommerce companies has been in focus for some time, particularly after Karnataka questioned Amazon’s fulfilment centre model and sought to impose value-added tax on goods sold through the site, treating it as a commercial agent, a characterisation that the company has rejected.
- Taking a cue from this, states such as Uttar Pradesh, Kerala and Delhi have sought to increase scrutiny on marketplace ecommerce platforms and made disclosure of monthly sales data mandatory for vendors registered with them.
- Most ecommerce sites are structured as marketplaces that facilitate trades between buyers and sellers to stay in compliance with overseas investment rules. India does not permit foreign investment in business to consumer (B2C) ventures.
- With ecommerce growing at a rapid pace in the country, state governments do not want to lose out on revenue. In most cases, invoices issued for online purchases show taxes levied, but states are not willing to take any chances as these companies have complex delivery structures.
- Marketplace firms have argued that they only facilitate sales and are not sellers themselves, so they shouldn’t be dragged into the tax net.
The fast food or QSR, format took off in India about 19 years ago with the arrival of McDonald’s in 1996. Many global brands followed the suit since then, either ...READ MORE
Faced with acute water shortage, particularly during the summer months, Bengaluru is struggling hard to cope . If this is the scenario now, how scary will it be in 2031? ...READ MORE
With the reopening of the Mysuru zoo after it was declared bird flu-free, more animals are set to join the zoo’s vast collection as part of the animal exchange programme ...READ MORE
In order to ensure that there is no shortage of drugs in State-run health centres and that procurement is directly proportionate to requirement, the Department of Health and Family Welfare ...READ MORE
The Ministry of Environment, Forest & Climate Change has notified the revised standards for coal-based Thermal Power Plants in the country, with the primary aim of minimising pollution. These standards are ...READ MORE
Seven years after the State Department was restructured to ‘de-hyphenate’ U.S. relations with India and with Pakistan, it is considering a reversal of the move. De-hyphenating refers to a policy started ...READ MORE
What is Pravasi Bharatiy Divas? Pravasi Bharatiya Divas (Non-Resident Indian Day), is celebrated in India on 9 January each year to mark the contribution of the overseas Indian community to the ...READ MORE
Fire in Kalkere Range Thousands of acres of forest cover burnt down in forest fire in Bandipur tiger reserve on Saturday and a forest guard succumbed to burn injuries while preventing the flames ...READ MORE
Karnataka State Health Department issues H1N1 advisory The State Health Department on 12th April issued an advisory asking people not to ignore symptoms of H1N1 and to see a doctor immediately ...READ MORE
The remaining will have to come from the State government or through private-public partnership. The larger the area, more the burden on the State government. Unlike the last year, when Rs ...READ MORE
Quick service restaurants
Bengaluru’s water needs in 2031: Master Plan paints
Mysuru zoo gets – ‘bird flu-free’ tag –
New Software to Track Supply – Demand of
Stricter Standards for Coal Based Thermal Power Plants
U.S. considers re-merger of India, Pakistan desks
Pravasi Bharatiya Divas: State to showcase startup prowess
Everything you need to know about Bandipur Forest
Karnataka Current Affairs – KAS / KPSC Exams
Smart City: Bengaluru’s core areas shortlisted for project