Odisha govt imposes entry tax of up to 2% on online purchase of goods
7 Nov 2014 12:02 AM GMT
The Odisha government headed by Naveen Patnaik has imposed entry tax of up to 2 per cent on online purchase of goods to check the malpractices of tax evasion by e-retail majors. As per the tax structure provision, the state will charge entry tax from courier companies, transporters and C&F agents dealing with online goods.
‘With this order in place, the online companies will have to fill up Form 40 before physical delivery of any goods in the state. Given the fact that most of online companies are registered either in Karnataka or Haryana’s Gurgaon, the taxes are being paid to the state only where it is registered,' Praveen Khandelwal, general secretary of Confederation of All India Traders (CAIT), told Millennium Post on Thursday.
'But, the states, where the goods are being sold, don’t get any tax, which is a blatant violation of tax rules’, he added.
Khandelwal further said, ‘After taking cognisance of commodities delivered in Odisha through purchase from online retail portals operating outside the state, the state government has issued a notification slapping entry tax on each such delivery in its state and respective delivery agents which could be either a courier company, transporter or C&F agent to furnish a statement of all such deliveries and proof of payment of entry tax on such deliveries to the taxation department of Odisha.’
It’s pertinent to mention here that Odisha has become the first state to charge entry tax from e-tail majors, while other states which are in queue to follow the suit are Kerala and Assam.
‘Though, the tax slab on online traders is of just two per cent, but it will help in assessing the actual volume of trade in the state. The state government will also be able to evaluate the actual loss of tax, which may help out in devising Goods and Services Tax (GST) module in the years to come’, said Brij Mohan Aggarwal, the national vice-president of Confederation of All India Traders.
‘Despite the fact that offline retailers are being charged taxes upto 15 per cent, but there is no tax slab in place for e-tailers, so they are easily manipulating the prices of goods by selling it at predictory rates, which is against the market ethics,’ alleged Khandelwal, adding that the entry tax will be paid by the online companies before delivery of goods to consumers.
Khandelwal, however, said that companies likely to charge the taxed amount from consumers only, which may increase the rates of online goods.
‘With this order in place, the online companies will have to fill up Form 40 before physical delivery of any goods in the state. Given the fact that most of online companies are registered either in Karnataka or Haryana’s Gurgaon, the taxes are being paid to the state only where it is registered,' Praveen Khandelwal, general secretary of Confederation of All India Traders (CAIT), told Millennium Post on Thursday.
'But, the states, where the goods are being sold, don’t get any tax, which is a blatant violation of tax rules’, he added.
Khandelwal further said, ‘After taking cognisance of commodities delivered in Odisha through purchase from online retail portals operating outside the state, the state government has issued a notification slapping entry tax on each such delivery in its state and respective delivery agents which could be either a courier company, transporter or C&F agent to furnish a statement of all such deliveries and proof of payment of entry tax on such deliveries to the taxation department of Odisha.’
It’s pertinent to mention here that Odisha has become the first state to charge entry tax from e-tail majors, while other states which are in queue to follow the suit are Kerala and Assam.
‘Though, the tax slab on online traders is of just two per cent, but it will help in assessing the actual volume of trade in the state. The state government will also be able to evaluate the actual loss of tax, which may help out in devising Goods and Services Tax (GST) module in the years to come’, said Brij Mohan Aggarwal, the national vice-president of Confederation of All India Traders.
‘Despite the fact that offline retailers are being charged taxes upto 15 per cent, but there is no tax slab in place for e-tailers, so they are easily manipulating the prices of goods by selling it at predictory rates, which is against the market ethics,’ alleged Khandelwal, adding that the entry tax will be paid by the online companies before delivery of goods to consumers.
Khandelwal, however, said that companies likely to charge the taxed amount from consumers only, which may increase the rates of online goods.
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