Value Added TaxLast year, Delhi government made it mandatory for e-commerce platforms to register with the Value-Added Tax department and to file regular turnover returns. It also made it compulsory for all dealers to register themselves with the government before commencing trading on these platforms. Nine months later, the system has tracked over 9,000 unregistered dealers on the 127 e-commerce portals that have so far enrolled with the VAT department. The portals include major ones such as,,, and
Of the 127 online platforms, only 67 have filed the returns stipulated by last year’s e-commerce protocol. Having received directions from the VAT department to take punitive action against the 60 defaulters, local authorities have issued notices to and imposed penalties on the in-compliant portals as per norms. Marketplaces that have failed to enrol themselves and those that did enroll but failed to file turnover returns are liable to be face fines of Rs 50,000. The VAT department may also register cases against them for tax evasion.
The list of registered dealers culled from the returns filed by these portals shows the vast trade networks that the virtual world has created. Data showed that had 6,928 Delhi-based merchants on its site, while had 16,165, 15,692, 9,799 and, 384 dealers. The list indicated that e-commerce was the sector on which the state should keep an eye on in the future to check tax evasion
Explaining the process, VAT commissioner SS Yadav said that the data that is emerging clearly shows that the e-commerce platforms need to be an area of focus to prevent dealers from operating illegally. The legal guidelines make it compulsory for any dealer carrying out any sort of business in Delhi to be registered with VAT department. This stipulation was extended to online commerce last year as the state government strove to clamp down on tax violations.
So far the government has not considered levying a tax on e-commerce platforms, having learnt it could prove troublesome. It also saw how ineffective such measures had proved in regulating trade in some other states. “The idea is not to discourage people from buying online but to ensure that there is no tax evasion,” said Yadav.
He also said there needed to be a balance between the brick-and-mortar market and the virtual market so that the tax-paying dealers in the capital’s traditional commercial hubs and those on the e-commerce platforms were all operating on a level playing field.
In a bid to regulate the functioning of e-commerce, the government had issued a notification last year, prescribing enrollment with the VAT department for all online platforms and making it imperative on online platforms to list the dealers operating with them.
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Source – ET Retail