In order to curb tax evasion by ecommerce companies, the Delhi Government has made it mandatory for all such companies to file their transaction details on the website of the Department of Trade And Taxes while paying tax, reports ET.
The move came after cases of tax evasion by some firms came to light. This move is aimed at regulating and to keep a close watch on all dealers and sellers engaged in selling of goods through online portals. It has been made mandatory by The Trade and Tax Department for such firms to deposit their due tax, along with their transaction details.
“In the financial year 2014-15, it came to our notice that some ecommerce companies selling goods through online portals were not depositing their due tax that they owe to the department. They used to collect tax from the consumers but did not deposit the money with government,” a senior official said.
With the ongoing boom in the ecommerce sector, the department felt it was imperative to regulate these dealers so as to bring them under the ambit of VAT. In order to clarify the process of tax collection, the Department met representatives of ecommerce web portals and addressed their issues last week.
Related Article: Tax Collected At Source Is An Unfair Liability For Ecommerce: IAMAI
From now on, ecommerce companies have to log on to government website — www.dvat.gov.in — to enrol and pay their taxes.
An official stated, “Non-compliance of the notification shall be treated as violation, which attracts penalty of INR 50,000, under section 86(14) of Delhi Value Added Tax Act, 2004.”
This is not the first time that ecommerce firms are being scrutinized by the authorities. In May this year, CCI had initiated investigation against ecommerce portals Flipkart, Snapdeal, Amazon, Jabong and Myntra for violating resale price & discount rules, as mentioned in the Indian Competition Act 2002.
In February, the government had proposed new economic reforms, designatingnine departments to watch ecommerce activities.
As per a research by Morgan Stanley, India’s online retail market is expected to cross $100 Bn mark by 2020 and the Indian Internet market as a whole is expected to raise $137 Bn by the same year. With behemoths like Amazon and Paytm planning war chests to the tune of $5 Bn and $500 Mn respectively, to grab a larger share of this pie, the sector will attract more attention from investors and regulators alike.
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