Are E-Commerce Websites Compliant With Indian State/Center Tax Laws?

[sandeepjaipur 1]

I have debout (but as per law I am sure); all e-commerce websites i.e. flipkart, amazon, ebay doing manipulation related state tax (VAT), they are bound to pay local VAT, but they are selling in CST and not paying VAT.

They can't sell value more than 5K from other state without paying local VAT. I know one incident for Samsung AC, they are doing direct billing from Noida and selling in Rajasthan, later Sales Tax department penalized the local office at Jaipur.

Even if we check amazon.com, they are charging state wise tax (as per delivery location).

Ebay on Top, they are clearly selling new items without paying any taxes (CST or VAT). (they are worried for they commission).

What you say ? I am planning to rise PIL at courts for this scam, after all its our state income, we are getting facilities from our state income.

[SUDYEcaZ 67]

I have debout (but as per law I am sure); all e-commerce websites i.e. flipkart, amazon, ebay doing manipulation related state tax (VAT), they are bound to pay local VAT, but they are selling in CST and not paying VAT.

They can't sell value more than 5K from other state without paying local VAT. I know one incident for Samsung AC, they are doing direct billing from Noida and selling in Rajasthan, later Sales Tax department penalized the local office at Jaipur.

Even if we check amazon.com, they are charging state wise tax (as per delivery location).

Ebay on Top, they are clearly selling new items without paying any taxes (CST or VAT). (they are worried for they commission).

What you say ? I am planning to rise PIL at courts for this scam, after all its our state income, we are getting facilities from our state income.

All E-Com websites are required to Pay local taxes,

Recently in Pune Flipkart was asked to shell out close to 1CR, towards local taxes,

But then not every e-Com websites have its own dedicated logistics

Also Model of Ebay is different than Flipkart or Amazon

Seller should be responsible to charge all the taxes, i

PIL is a nice way forward

Edited July 24, 2014 by SUDYEcaZ

[KanagaDeepan 1,084]

So you are saying that they need to pay both CST and VAT? That's not at all needed IMHO. Octroi LBT is different IMHO.

Vat is applicable in same state sale and in that case also CST is not needed to be paid.

In eBay AFAIK, the bill + tax details are sellers responsibility. EBay is just a medium. So you want both seller and medium to pay minimum 5% (from the 6% or so commission) tax for same goods?

sent from my rooted Droid MAXX using Tapatalk

Edited July 24, 2014 by KanagaDeepan

[Bablus 66]

But its no scam

they are passing the benefit to the consumer..

so why not take the benefit? especially when the govt's interests are in conflict with the interests of citizens (most times)

[sandeepjaipur 1]

I have debout (but as per law I am sure); all e-commerce websites i.e. flipkart, amazon, ebay doing manipulation related state tax (VAT), they are bound to pay local VAT, but they are selling in CST and not paying VAT.

They can't sell value more than 5K from other state without paying local VAT. I know one incident for Samsung AC, they are doing direct billing from Noida and selling in Rajasthan, later Sales Tax department penalized the local office at Jaipur.

Even if we check amazon.com, they are charging state wise tax (as per delivery location).

Ebay on Top, they are clearly selling new items without paying any taxes (CST or VAT). (they are worried for they commission).

What you say ? I am planning to rise PIL at courts for this scam, after all its our state income, we are getting facilities from our state income.

All E-Com websites are required to Pay local taxes,

Recently in Pune Flipkart was asked to shell out close to 1CR, towards local taxes,

But then not every e-Com websites have its own dedicated logistics

Also Model of Ebay is different than Flipkart or Amazon

Seller should be responsible to charge all the taxes, i

PIL is a nice way forward

Yes, all E-com websites are responsible to pay VAT, check at USA amazon they are collecting state tax (here VAT) and depositing in concern department.

Ebay is equally responsible as they are selling agent. and when you are getting commission, you must collect VAT from customer and pay it to department.

So you are saying that they need to pay both CST and VAT? That's not at all needed IMHO. Octroi LBT is different IMHO.

Vat is applicable in same state sale and in that case also CST is not needed to be paid.

In eBay AFAIK, the bill + tax details are sellers responsibility. EBay is just a medium. So you want both seller and medium to pay minimum 5% (from the 6% or so commission) tax for same goods?

sent from my rooted Droid MAXX using Tapatalk

example : If flipkart selling product from B'lore and delivering in Hyd, they must transfer the stock from B'lore to Hyd and then issue VAT invoice.

When ebay getting commission and arranging deliveries, it is there responsibility to collect state wise VAT and deposit in sales tax.

What is Sales tax (VAT) and who is responsible to collect, pl check with Sales Tax consultant, you will know the rules.

If you are running into sale / purchase / dispatch / commission, you are responsible to collect VAT. and for ebay they are selling all without bill items, they are showing that they are selling used item (2nd sale).

But its no scam

they are passing the benefit to the consumer..

so why not take the benefit? especially when the govt's interests are in conflict with the interests of citizens (most times)

It is a big scam, no law permitted that if you are passing benefit to some one, you only responsible for TAX, not the buyer.

see 2 G scam, who got cheaper rates, & who is behind the bars.

Who runs Govt. Govt is not private body. We are into Govt.

you see, these e-com web-site clearly into unfair competition business. they are creating unemployment in our country. see mobiles shops, they are disappearing very soon.

Any way If govt collects tax, we are will be benefited, we got water, power, roads.

[Deepak Shankar 79]

Basically many aspects here are confused not only e-com sites whenever the govt increases taxes direct or indirect its passed on to customers if burden is high company bear a portion rest is transferred to end user.With regard to VAT we are talking about sales so transfer of goods from one state to another is liable for vat taxes of home states and sellers charges vat and pays to the department.Ebay is a mere facilitator more of a mediator seller offers products via ebay and we buy thro the same and ebay charges a commission for the service provided to the seller billing vat collection onus is on seller not on ebay.

[kalpeshaparmar 66]

CST is payable only when you sell outside your state @ 2%

No other tax is supposed to be paid then...

If the seller purchases inside the state he must have already paid VAT also..

For e.g. if a Delhi seller sells a new brand phone to Mumbai he should levy CST only...

If the Delhi seller purchases the mobile from Delhi only then he must have paid a bit of VAT already..

And VAT (Value Added Tax) is supposed to be paid only when the sales is inside the state....

For e.g. If a Nashik seller sells his mobile to a Mumbai person only VAT should be applied...

[ni0987 179]

Didn't know differences between CST & VAT.

Thanks Kalpeshji,

[kshah 452]

I don't know under which law states can demand vat from e commerce sites? AFAIK sales tax act says that seller is supposed to charge maximum rate of vat applicable in state for out side state customers if C forms are not provided.

I don't think it is responsibility of destination state to check whether VAT or sales tax is paid. Destination state may check if transactions are legal or not.

Is there any laws for e commerce sites yet? There is no revenue loss to any one if original state checks transactions meticulously and see if full tax is paid. All ecomm websites provides just platform for selling to sellers.

[mgdelhi 192]

after all its our state income, we are getting facilities from our state income.

"Our" state income - yes but only 20-30%.

Rest all goes to politicians' swiss (now some other country) bank account.

So if you are so interested in increasing politicians' income, try your luck by filing the PIL. Then we all will hear even bigger figures of the scams happening in "our" state and "our" country.

[csmart 472]

Flipkart charged VAT on my Asus phones and it is the proper practice. They are billed from Bangalore to Mumbai. While many B2B sites, charge CST in such scenario and asked for C Form. But since I am an individual and no sales tax registration, they charged me VAT. In fact Flipkart will charge VAT to even a company as they will not run after them for C Form. They are liable to pay local tax in Mumbai that is Octroi or LBT. Local tax is payable at the entry point so it should have been paid. Flipkart in Pune might be asked to pay LBT and that is the standard practice.

[KapilAgrawal 340]

CST - Central Sales Tax. Applicable in case of inter-state sale. CST is applicable at rate of 2% or 1% against Form C (Registered Dealers), Form D (Individuals). In case of no Form C, CST is applicable at seller state's VAT rate.

VAT - Value Added Tax, Applicable in case of intra-state sale.

Technically when FK sells a item from Mum to Blr without Form C, CST has to be applied at rate of VAT. But many times seller charge VAT so that they save the work to file return / deposit tax in other head (VAT & CST).

A seller from Mumbai can never deposit VAT or CST in Bangalore. He has to file return from the place of issue of TIN#, CST#.

[sandeepjaipur 1]

CST - Central Sales Tax. Applicable in case of inter-state sale. CST is applicable at rate of 2% or 1% against Form C (Registered Dealers), Form D (Individuals). In case of no Form C, CST is applicable at seller state's VAT rate.

>> CST is applicable on VAT rate without C Form, and with C Form it is 2% since long, during lunch of VAT (Value Added Tax System) Govt. promised removing of CST by 4% > 3% > 2 % > 1% each year and phage out CST, but they stick with 2% CST. Now planning for GST (Goods & Service Tax).

VAT - Value Added Tax, Applicable in case of intra-state sale.

Technically when FK sells a item from Mum to Blr without Form C, CST has to be applied at rate of VAT. But many times seller charge VAT so that they save the work to file return / deposit tax in other head (VAT & CST). >> No if they are selling from B'lore to Mumbai >> they must charge CST, they can't collect VAT. in this case they might be issued mumbai local invoice instead of b'lore invoice.

A seller from Mumbai can never deposit VAT or CST in Bangalore. He has to file return from the place of issue of TIN#, CST#.

As per law, they must collect local VAT and issue local state address (Branch office) invoice. After all they have own delivery network in each state.

It's huge loose poll inside, even above 5K worth of item buyer can't buy from other state, if required buyer must be demand way-bill from Sales Tax department. That's why lot of e-commerce sites not shipping items in WB and Assam.

[kalpeshaparmar 66]

CST - Central Sales Tax. Applicable in case of inter-state sale. CST is applicable at rate of 2% or 1% against Form C (Registered Dealers), Form D (Individuals). In case of no Form C, CST is applicable at seller state's VAT rate.

>> CST is applicable on VAT rate without C Form, and with C Form it is 2% since long, during lunch of VAT (Value Added Tax System) Govt. promised removing of CST by 4% > 3% > 2 % > 1% each year and phage out CST, but they stick with 2% CST. Now planning for GST (Goods & Service Tax).

VAT - Value Added Tax, Applicable in case of intra-state sale.

Technically when FK sells a item from Mum to Blr without Form C, CST has to be applied at rate of VAT. But many times seller charge VAT so that they save the work to file return / deposit tax in other head (VAT & CST). >> No if they are selling from B'lore to Mumbai >> they must charge CST, they can't collect VAT. in this case they might be issued mumbai local invoice instead of b'lore invoice.

A seller from Mumbai can never deposit VAT or CST in Bangalore. He has to file return from the place of issue of TIN#, CST#.

As per law, they must collect local VAT and issue local state address (Branch office) invoice. After all they have own delivery network in each state.

It's huge loose poll inside, even above 5K worth of item buyer can't buy from other state, if required buyer must be demand way-bill from Sales Tax department. That's why lot of e-commerce sites not shipping items in WB and Assam.

No if the buyer sells directly with VAT only then no need of CST as explained... As for CST he has to prove that he sold out of state(So the seller needs C Form) he can VAT rebates....

[KapilAgrawal 340]

As per law, they must collect local VAT and issue local state address (Branch office) invoice. After all they have own delivery network in each state.

No such law imho. As per law they have to collect VAT & issue local state invoice if they have a Branch office & not delivery network. And having a Branch office in every state is not possible from e-commerce companies.

Flipkart sent me (Katni, MP) a router from Bangalore & they charged 5% CST on invoice which is correct.

[sujit_k 141]

But from any state you buy the item and even if they charge VAT or CST or any other tax, the final MRP for us remains the same. Moreover they print a valid TIN number on their bills, so why should we, as the buyer worry ?

[KapilAgrawal 340]

MRP can varry from state to state. Like Diesel & Petrol is cheaper in Delhi while its much expensive in Mumbai because of Tax variation.

Many items in Delhi are charged @ 5% which are charged @ 13% in MP. That's the reason government is pushing GST so that prices are same all over India.

[sujit_k 141]

But Kapil bhai, if you buy from any state from Flipkart or Amazon, the selling price remains the same.

[KapilAgrawal 340]

Companies are making profit due to tax variation. My line of business, Earthmoving Machinery parts, Tax in MP, WB @ 5% while in MH its 13%

[sandeepjaipur 1]

Another law is to avoid sales from other state is WayBills (Forms). and in few state >5K worth of materials, seller must attached way bills (own state and purchaser state) along with invoice. If customer is not registered from sales tax department (individual users), he must collect the way bill from sales tax department and send it to seller. but here e-commerce sites they are sending all materials even without invoice.

It is a big scam, if one challenge.

I don't want to hijack this thread topic, so my request to moderators for creating new topic, if this forum need further discussion.

[kshah 452]

Way bill is a big time hurdles created by financially weak and indisciplined state and according to person like me who belongs to state like Gujarat is a big scam to keep states backwards.

Very few poor states require way bills or road permit. Surprisingly recently state like karnataka introduced E SUGAM and it is creating so many hurdles to them.

If e commerce sires are charging full CST instead of VAT then there is nothing wrong as from cst recipient state gets its share of taxes.

[rajanmehta 4,056]

<< This topic created after splitting posts from topic "E commerce Websites - Good, Bad & Ugly" >>

[digitalnirvana 646]

Another law is to avoid sales from other state is WayBills (Forms). and in few state >5K worth of materials, seller must attached way bills (own state and purchaser state) along with invoice. If customer is not registered from sales tax department (individual users), he must collect the way bill from sales tax department and send it to seller. but here e-commerce sites they are sending all materials even without invoice.

It is a big scam, if one challenge.

I don't want to hijack this thread topic, so my request to moderators for creating new topic, if this forum need further discussion.

Err no, in fact many ebay sellers clearly say they will not ship to WB and some parts of UP and NE (a few examples) because here waybill is required (and it is the customer's responsibility to get the waybill - ridiculous!)

My guess is you are looking at the wrong problem. Waybill, CST, entry tax - are all anti business and ultimately anti people. If ecommerce websites stopped shipping due to lack of waybill then who is the end loser? The customer. Not the etailer, not the archaic government - but the customer who cannot buy something cheaper and quicker online

If you really want to file a PIL, focus on an uniform tax which should do away with the multitude of VAT, CST etc

[sandeepjaipur 1]

Err no, in fact many ebay sellers clearly say they will not ship to WB and some parts of UP and NE (a few examples) because here waybill is required (and it is thec customer's responsibility to get the waybill - ridiculous!)

My guess is you are looking at the wrong problem. Waybill, CST, entry tax - are all anti business and ultimately anti people. If ecommerce websites stopped shipping due to lack of waybill then who is the end loser? The customer. Not the etailer, not the archaic government - but the customer who cannot buy something cheaper and quicker online

If you really want to file a PIL, focus on an uniform tax which should do away with the multitude of VAT, CST etc

You are debiting tax system simplification & thread topic is " E-Commerce Websites Compliant With Indian State/Center Tax Laws? " I am talking with current tax system, which we have to follow and I am clear about my wish : not to lose any employments of local residents due to unhealthy competition.

You see, any MNC like Amazon or wallmart can put tiny amount (for them) and they can spoil local business.

Why Amazon USA collecting state tax while delivery on particular state address.

In my view ebay.in is fraud, they are supporting anti tax practice and arranging deliveries.

Uniform tax system (GST), Govt is planning but accounts must be on computer system for smoother flow, online work etc. which is currently not suitable for Indian condition, in Hyderabad, in day time 4 hrs. power cut applicable, Industries need to close 3 days in week due to power shortage.

All the best.

[KapilAgrawal 340]

eBay.in is a big time fraud in regards to Taxes, they are allowing everyone without any compliance. But as per their T&C Seller / Buyer are responsible for Taxes, Duties etc.

And as I said earlier 5% & 13% VAT for same item in 2 diff states, Margin comes to 8%, Wholesale business works on 4-5% margin and here people can earn much just due to tax variation. While GST will stop all of this.