Media reports say that the Kerala Commercial Taxes Department has slapped a fine of Rs 54 crore on four e-commerce companies, including Flipkart and Jabong, for tax evasion.
The intelligence wing of the Commercial Taxes Department imposed the fine for the last two years, the reports say. E-commerce major Flipkart has been fined Rs 47.15 crore, Jabong Rs.3.89 crore, Vector e-commerce (which has a stake in Myntra) Rs 2.23 crore and Robemall Apparels (which runs Zovi.com) Rs 36 lakh, stated reports.
This is not the first time that e-commerce companies have faced an issue with state tax departments. Last year, Amazon, had run afoul of the Karnataka government over whether it was liable to pay VAT on goods sold in the state. Punjab is another state, which has been adopting a tough stance on e-commerce in recent months.
The situation in Kerala is in limbo as last year some e-commerce companies had stopped delivering products in the state after the government banned the CoD (Cash on Delivery) service. Though, reportedly, delivery has restarted, there is no clarity whether the ban on CoD still applies.
The lack of a framework for taxation of e-commerce companies is one reason why e-retailers are looking forward to the implementation of GST. GST is expected to unify disparate taxes at the centre and state level under one umbrella and make the process of taxation easy for the retailer. Besides, even if the currently expected GST rate is not reduced, retailers say that products will cost less under the new tax regime.