HYDERABAD: The move by the Telangana Government to impose tax over transactions carried by the e-commerce firms like Amazon and Flipkart, had left the online companies in all blues. The latest development in the Telangana State is likely to stir controversy between the State and the e-commerce firms.
However, the State Government looks determined to go ahead with its new tax policy. Notably, the decision from the Telangana Government comes at a time where the Union e-commerce and Industries Ministry had been working over forming rules and regulations governing e-commerce firms.
The situation in Telangana is likely to carve out as yet another dispute between the e-commerce and the State Government. Earlier, the e-commerce firms like Amazon and Flipkart have refused to pay the sales tax levied by the Indian States of Maharashtra and Karnataka.
It must be noted that the firms like Amazon and Flipkart have established their fulfillment centers in Hyderabad, the capital of Telangana with the assurance of the State Government of a IT-friendly stance. Sandeep Kumar Makthala, global president of Telangana Information Technology Association said, “I think this is not a right move from a developing state like Telangana. When several e-commerce sites are looking at Telangana as an investment destination, Government must provide IT-friendly policies to encourage them rather than trying to levy new taxes”.
On the other hand, defending the Government’s stance Commerce Minister for Telangana, Mr Srinivas Yadav said “It is very clear that our Government is always favorable to the industries. However, there should be a proper management to regulate all the online transactions and see that no one is out of the tax purview.”
As per the sources, the Commerce Ministry of Telangana will soon conduct a meeting to discuss the proposal for imposing a possible tax on the e-commerce sites. The Government may go ahead in amending the VAT Bill to bring in all the e-commerce platforms under it, the TOI reported.
