In order to give a level playing field for local retailers in the State, Gujarat legislative Assembly has passed the Gujarat Tax on Entry of Specified Goods into local Areas (Amendment) Bill 2016 suggesting entry tax on goods purchased via e-commerce.
The Bill was passed in absence of Opposition Congress MlAs as they were suspended for creating pandemonium. It amended the present Act of 2001 which has not covered e-commerce transactions. The intention was the State Government for the amendment is to protect local traders as the goods being purchased through e-commerce are much cheaper than the goods being sold at the retail shops in the State. The main reason for it is no local tax on e-commerce goods.
Following numerous representations from various trade bodies, the Bill was introduced by the State Government with the intention to cover online purchases under local tax regime. As the bill passed in the Gujarat Assembly, the State Government would come out with tax slabs for e-commerce under the Act through notification.
Presenting the bill Gujarat’s Finance Minister Saurabh Patel said that e-commerce is a new phenomenon in retail market and hence online purchases were not covered under the present Act. As a result of it the local traders were suffered and were not able to stand in competition, said Patel.
The new amendment in the Bill specifies that those who bring or facilitate any specified goods for consumption, use or sale in Gujarat for any part of the country using online platforms. With the new amendment such person or legal entity would be liable to collect the tax from the seller for whom the goods purchased and pay the tax to the State Government.