Gujarat govt studying tax structure of e-commerce cos for loopholes
December, 02nd 2014
The Gujarat government is studying tax structure as well as the business model of e-commerce portals to find out possible loopholes which might be giving them an edge over retailers in terms of pricing of products.
“At present, we are studying the taxation structure applicable to such e-commerce portals in Gujarat, especially when they are selling articles at such a low price. “We have to find out if there exist any loopholes in the tax structure which is benefiting them,” state Finance Minister Saurabh Patel said here.
To a query whether the state government is planning to impose a separate tax on such firms doing business in Gujarat, Patel did not rule out the possibility.
The minister echoed concerns of local traders, who are wary about their existence after a range of e-commerce portals have started selling goods at ‘predatory prices’. “It is our duty to protect the retailers of Gujarat. There must be a level playing field. We need to find out if there exists a difference in taxes paid by traders against taxes paid by portal owners. We are also studying which are the taxes these portals actually pay,” he said.
As of now, a study about the tax structure applicable to such portals is being conducted. Decision on whether to impose additional tax or revise the tax structure for portals will be taken later, Patel added.
A month ago, Commerce and Industry Minister Nirmala Sitharaman had acknowledged that the government has received many complaints from traders regarding Flipkart’s massive discount sale that raked in Rs 600 crore in a single day.
Patel assured to look into complaints of ‘predatory prices’ on goods sold by Flipkart after traders alleged that the e-commerce giant resorted to unfair trade practices. Local traders are up in arms against e-commerce portals for eating into their business due to attraction among consumers to purchase online as they offer huge discounts.