IT industry body Nasscom on Thursday came out against a Bill introduced by the Gujarat government to levy entry tax on consumers for inter-state e-commerce and similar practices of some other states, saying it poses a significant challenge.
“Nasscom believes this levy of entry tax poses significant commercial challenges for e-commerce and logistics companies and to retailers from outside of Gujarat, selling goods to customers in the state,” the industry body said in a statement.
A similar levy is being enforced in Assam, Odisha, Uttarakhand, Rajasthan, Mizoram and Himachal Pradesh and is proposed to be levied in Punjab, Uttar Pradesh and Madhya Pradesh, it added.
“Providing un-restricted cross border access to sellers as well as buyers is the prerogative of the government and is an important driver towards creating ease of doing business,” President of Nasscom R Chandrashekhar said.
“Such tax structure will lead to additional burden on SME traders, enhanced litigation,” he said. Beside reducing business efficiencies, it will also restrict choice of the customer, he added. The entry tax, payable by the consumers, will be collected and deposited by entities that bring specified goods to the state from any other part of the country for consumption and sale.
Gujarat government in March passed a bill to levy entry tax on goods purchased through e-commerce portals. The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed to amend the present Act of 2001 that did not cover e-commerce transactions.