In an attempt to boost revenue collections, the VAT department has reportedly started tightening noose around e-commerce portals by directing them to furnish all the details of their dealers and explain their modus operandi and operations by November 17 in the national Capital.

According to the just concluded survey of ASSOCHAM, Delhi-NCR has recorded the highest decline in footfalls at city malls. As per the study, about 120-150 malls were launched in the past two years but close to 65-70 per cent of the spaces in many of the malls still remain empty. Several malls, unable to attract crowd and shops are even shutting down, said the survey.

It is estimated that the Delhi Government has expected to generate Rs800 crore to Rs1,000 crore in the current financial year.

The VAT department has collected Rs10,901.79 crore till October 23 as compared to Rs9,982.45 crore during the same period of previous year.  The growth rate is 7.70 per cent which is not considered as sound.

The Delhi Government had issued notices to all online trading companies for evading Value Added Tax (VAT) and asked them to submit details about their dealers. Online trading companies, including Snapdeal, Amazon, Junglee, Flipkart, that have made brisk business in the Capital but have been accused of not paying VAT to the Delhi Government on some pretext or the other.

All such people engaged in the business of e-commerce should have to enroll themselves by logging on to the website of the department at first by clicking on the relevant link in the menu, said officials.

The VAT department has also sought details about net sale turnover of a dealer, reducing there from the turnover of the sold goods returned which have been sold during the same quarter. It is noted that Delhi Government’s VAT department has issued notices to online trading companies in April this year. Now the department has again asked to submit details about their business transactions.

It is estimated that all leading ecommerce companies have together notched up a turnover of over Rs800 crore from business in Delhi in 2014. If the trend is taken into account, their income is bound to multiply in 2015. The Delhi Government is expected to generate revenue to the tune of over Rs800 to Rs1,000 crore from online trading business this year. With online shopping picking up in a big way, the VAT Department sees e-commerce as a trade platform that needs regulation.

According to sources, many of these ecommerce companies are taking the plea that they are acting as only service providers while the manufacturing companies are doing the business. Therefore, the tax liability lies with those companies that are manufacturing the products. But the VAT officers are not ready to buy this theory. They claim that the real business is being performed by the ecommerce companies as they book orders online and ensure delivery of goods to the consumers at their chosen address. All ecommerce companies have tax obligation towards the Delhi Government and must pay VAT like any other dealer or businessman of the city.