Karnataka, Amazon agree to discuss VAT issue

BENGALURU: Chief minister Siddaramaiah on Thursday directed the finance and commercial taxes departments to have a second round of talks with e-commerce firms over the tax evasion controversy. Speaking to the media after a meeting with the department officials, which was also attended by representatives of e-commerce major Amazon India, Siddaramaiah said: "Our department has noted that there is tax evasion.While the department is seeking VAT, the companies are not ready to pay. However, dealers pay the taxes. As a result, I have asked both the finance and commercial taxes department to have a second round of meetings with the company representatives and arrive at a consensus."
Asked whether the government intends to amend the rules and relax the norms for e-commerce business in the state, Siddaramaiah said it was under consideration and will be decided only after the second round of talks. "I have asked them to find a solution to this problem. Ultimately, our aim is that there should be no evasion of taxes and revenue should come to the government," he said.
Asked whether Amazon has planning to relocate to Andhra Pradesh, Siddaramaiah said the company had not broached the subject with him. At the launch of a fulfillment centre (FC) in Telangana in April, Amazon had said the policy parameters in Karnataka were not in sync with the e-commerce industry's demands. Amazon has been demanding exemption on VAT payment saying its FCs only stocked, packed and dispatched products and was not doing business directly.
It wants the government to collect VAT from sellers. The state's stand is that there is no provision in the state's VAT rules for retailers to take shared space at Amazon's FCs.