NASSCOM opposes entry tax by State Government on E-commerce transactions

National Association of Software and Services Companies (NASSCOM) has expressed its discontentment on a bill by Government of Gujarat to levy entry tax on consumers for interstate ecommerce transactions. NASSCOM believes that such a move will pose significant commercial challenges for e-commerce and logistics companies and to retailers from outside of Gujarat, selling goods to customers in the state. A similar levy is being enforced in Assam, Odisha, Uttarakhand, Rajasthan, Mizoram and Himachal and is proposed to be levied in Punjab, Uttar Pradesh and Madhya Pradesh.

This 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. This levy of entry tax poses significant challenges both commercially and operationally for the e-commerce companies, logistics companies and the outside state sellers selling goods to customers in the state.

Sharing his thoughts on the issue, R. Chandrashekhar, President, NASSCOM said, “The e-commerce sector aspires to unify the country digitally into a single entity. 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 an ease of doing business. Such tax structures will lead to additional burden on SME traders, enhanced litigation, and also reduce business efficiency. It will also restrict choice of the customer.”