Flipkart has sued the state of Uttarakhand for its decision to impose a 10 per cent entry tax on goods purchased through ecommerce. Calling the levy “discriminatory”, the ecommerce giant has filed the writ through its in-house logistics arm EKart Logistics in the high court of Uttarakhand in Nainital.
According to a report in The Economic Times, Flipkart has argued in its petition – filed in February – that while the standard rate of entry tax is 5 per cent, goods purchased through e-commerce companies have been subjected to entry tax at the rate of 10 per cent.
The petition stated: “This new scheme is ex facie discriminatory wherein an additional tax burden is imposed on ‘goods’ procured through a different stream of commerce or commercial mobility. This is an aberration from the scheme of the UT Entry Tax Act, which sought to levy entry tax on specified goods irrespective of the entity from where they were procured.”
Maharashtra, Bihar and Karnataka already have an entry tax on e-commerce purchases and almost half a dozen states are in various stages of imposing similar taxes.
TROUBLE IN UTTAR PRADESH
But Flipkart’s woes did not end with Uttarakhand. The Allahabad High Court has censured the commercial tax department of Uttar Pradesh for using “dubious” means to withdraw Rs 49 crore from the bank accounts of online marketplace Flipkart in lieu of value-added tax dues, saying it will be difficult for business houses to function if the government departments were to function in such a “cavalier fashion”.
A report in The Economic Times states: A bench of justices Vinod Kumar Misra and Tarun Agarwala also imposed Rs 2 lakh cost on the erring tax officer and ordered him to pay the money to Flipkart. The bench said the move smacked of a “deliberate” attempt to withdraw money from the company’s accounts by passing assessment and attachment orders without issuing notice to the company.
This is the second time that the Uttar Pradesh tax department has withdrawn money from the accounts of Flipkart without notice. Earlier, it had withdrawn Rs 27 crore in a similar manner for VAT dues of three years.