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Gujarat to levy tax on e-commerce transactions


With an aim to provide a level playing field for traders and retailers in the state, the state of Gujarat on Thursday passed a bill to levy an entry tax on goods purchased through e-commerce portals.

Gujarat to levy tax on e-commerce transactions
Goods bought online are set to get more expensive since Gujarat has decided to tax e-tailers

The tax, levied on the entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed in the state assembly. Congress MLAs were not present while this decision was taken, as they were suspended on Wednesday by the Speaker for two days .

The bill altered the present Act of 2001 which did not include e-commerce transactions. According to the state government, the present act was having a serious effect on the local entrepreneur. The goods purchased through online platforms, coming inside the state, were sold at less price because the traders were not liable to pay any tax.

“Due to the recent development in the field of online purchase, web-based software applications or through tele-shopping platforms, which does not attract any tax under the present Act, local businesses were adversely affected. As per the bill, the word ‘importer’, as specified in the present Act, now also covers those who bring or facilitate to bring any specified goods for consumption, use or sale in Gujarat from any part of the country using online platforms,” State Finance Minister Saurabh Patel was quoted by PTI as saying.

The state was forced to amend the bill after brick-and-mortar traders demonstrated against e-tailers selling goods at a much cheaper rate since they are exempted from taxes. This bill in the state budget has brought the local traders and e-tailers on the same platform.

“The state government would announce the rate of tax as well as other procedures to be followed by the importers through a separate notification,” Patel was quoted by PTI as saying.

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