Online Shopping to be Costly Due to Imposed Tax on Ecommerce Companies

Online Shopping will be costly in some States from 1st April 2016. Gujarat, Rajasthan, Madhya Pradesh and Uttarakhand State Government have added entry tax on e-commerce companies State government wants to increase state income. So now the companies are willing their customers to pay that entry tax.

So the state government’s first taget for increase income is on e-commerce websites. According to e-commerce companies that customers have to pay entry tax plus service tax. Each state had put different tax rate on e-commerce companies. Every state have different entry tax.

State Government had put product tax on e-commerce companies. There 5.5 percent tax rate in the Rajasthan State. E-commerce companies have to pay 6 percent entry tax in Madhya Pradesh. There online shopping is grown quickly from last few years in Madhya Pradesh.

Online Shopping to be costly
Online Shopping to be costly

products that are made in Gujarat and sold in other states will also be subjected to VAT based on the entry tax of the state it is being sold into. Leading ecommerce players have had differences with the entry tax policies of governments of UP (5%), Rajasthan (5.5%), Bihar, Assam, and Uttarakhand (10%).

The Gujarat Government mentioned entry tax on product delivery in budget 2016-2017. From this kind of taxes, the state government will earns Rs 30 crore annually. Earlier Kerala, Uttarakhand and Asam had put a tax on e-commerce companies. Now Gujarat, Rajasthan and Madhya Pradesh government started this scheme. It is a new way to increase state income. So friends, the online shopping must become costly.

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