Tamil Nadu’s tax officials have put on hold their plans to amend the state’s value added tax (VAT) laws which were aimed at taxing e-commerce transactions, as the new uniform goods and services tax (GST) expected to come into effect by April 2016.
A commercial taxes official in Tamil Nadu told TOI that with GST likely to be rolled out from April 2016, they expect e-commerce to get specific attention from policy makers in the next few months and hence amendments in state tax laws being mulled earlier, are not a priority right now.
Industry watchers expect GST to end tax woes of e-retail industry as it would subsume the existing archaic tax laws and may lay down a clear framework specific to the industry getting rid of the various interpretations and differential tax structures that plague the sector currently.
In the past, e-commerce players faced scrutiny from tax authorities of various states — including Karnataka and Tamil Nadu — who believe that companies like Amazon and Flipkart were acting as agents for the vendors selling through their portals and hence needed to come under the tax net.
Tax consultants say that, besides making deliveries efficient on the back of single tax structure across states, GST will help e-retailers decide on distribution networks without worrying about tax interpretations.
Source – ETRetail.com