 "Amazon warns of shutting B'lore warehouse, Karnataka asks taxmen to ease up")
Just days after the Karnataka government’s tax department sent notices to third party merchants working with Amazon India, directing them to stop storing their products in Amazon’s Bangalore fulfilment centre, the state government has reportedly asked its tax men to go easy until an amicable solution is reached on the issue on who should be liable to pay value added tax.
At stake is a $ 2 billion investment and sources have been quoted in the Economic Times as saying that Amazon will move its warehouse out of Karnataka if the confusion persists. It will probably have to start delivering orders coming from Karnataka through other fulfilment centres.
An Amazon India spokesperson told Mint the issue over who will pay VAT has emerged because the tax laws “have not kept pace with the new-age online business models that enable a faster, convenient and nationwide access to customers for sellers, especially small and medium businesses, at significantly low costs”.
The state commercial tax department recently issued notices to about 50 dealers selling products on Amazon India’s online marketplace without paying value added tax to the state exchequer. The department also directed the third-party dealers to stop using Amazon’s warehouses for storing their goods, which are shipped to buyers on placing purchase orders on its online platform.
Though Amazon claims to be only a service provider facilitating sale of goods between a dealer and buyer and hence not liable to pay any tax, since it does not own goods at any point of sale, the state tax department insists that the e-tailer should also pay sales tax on all orders placed through its online platform, as the goods are stored and shipped from its warehouses.
According to the Economic Times report, Amazon has reportedly suggested that the Indian government introduce a rule similar to the one in the US where online platforms have to disclose details of transactions. The government here could make it mandatory for e-commerce companies to furnish seller’s identity and VAT collected, to tax authorities from time to time to help them cross-check tax compliance.
Meanwhile, Nasscom president R Chandrasekhara too has said that the Karnataka government should facilitate the growth of e-commerce by removing tax issues faced by dealers of global e-tail major Amazon India in selling goods in the state.
“As e-commerce brings efficiency in the market and boosts economic activity, its players should be encouraged for the benefit of all stakeholders, including manufacturer, dealer, facilitator and end-user,” Chandrashekhar said.
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
