Ecommerce players are vexed as more states want to levy ‘entry tax’ on goods bought online

Ecommerce industry is up in arms with state governments that are thinking to levy an ‘entry tax’ on goods purchased online and coming in from other states.

After the Uttarakhand government imposed a 10% entry tax on goods purchased on Flipkart, other states such as Gujarat, Madhya Pradesh and Rajasthan are also thinking of following the suit.

While Flipkart has sued the Uttarakhand government, ecommerce players allege the tax is 'discriminatory' and even 'unconstitutional'.

Even Bihar and Assam have started imposing an entry tax - a tax states impose on goods coming in from another state - on goods purchased online.

Ecommerce players say the tax imposed on the courier agent delivering the items will gradually increase the price of the good and this also amounts to double taxation.

Sudhanshu Gupta, vice-president (business) at Paytm told ET, “These kinds of levies act as a major deterrent for sellers from different parts of the country who have been traditionally supplying to showrooms in the state and are now selling directly to consumers.”

It is noteworthy Madhya Pradesh Finance Minister Jayant Malaiya, in his Budget speech, announced the state government’s wishes to impose an entry tax of 6% on goods purchased online to compensate for the loss due to ecommerce.

(Image: Indiatimes)