NEW DELHI: In what could spell trouble on the tax front for India's ecommerce companies, some state governments have asked those that function as marketplaces to provide monthly sales data for vendors registered on their platforms.
More states are expected to follow the lead of Delhi, Uttar Pradesh and Kerala, which have introduced new disclosure norms, likely adding to the complexity and cost of ecommerce. This would mean an added layer of scrutiny on companies such as Flipkart, eBay and Amazon India, all of which are structured as marketplaces that facilitate trades between buyers and sellers in order to stay in compliance with overseas investment rules.
While invoices accompanying online purchases through these sites mention taxes levied, the states are looking to make sure there is no evasion of levies taking place through a complex web of delivery structures. The marketplace model has led to some confusion about the levy of sales tax or value-added tax levied by states.
An Amazon India spokesperson said: "We are undertaking compliance as per requirements of local state tax laws." Other ecommerce companies couldn't immediately be reached for comment.
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