The proposed tax on e-commerce in Gujarat is only meant to provide a level-playing field to small retail and Mom and Pop stores and not to generate revenue, said the State’s Finance Minister Saurabh Patel.

“It is only an entry tax to be levied on goods that come to the State from other States where there is a tax differential,” he told the BusinessLine , adding that a number of other States have come up with similar measures.

The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, that was introduced by Patel and passed by the State Assembly in March, proposes to levy a 15-per cent entry tax on online purchases. It has however, raised concerns amongst e-commerce players and Flipkart has now approached the Gujarat High Court challenging the levy.

Industry association National Association of Software and Services Companies (NASSCOM) too had opposed the move to levy interstate taxes on e-commerce.

Apart from Gujarat, a number of other States, including Assam, Odisha, Mizoram and Rajasthan, have similar taxes.

Goods and Services Tax

Meanwhile, Patel also supported the Goods and Services Tax regime and said States are waiting for its roll out.

“We have decided to forego our concerns for national interest and we are in favour of GST,” he said. The State had earlier opposed the indirect tax reform over concerns of revenue loss as it is a manufacturing State. GST would, however, be a destination-based consumption tax.

comment COMMENT NOW