State may amend VAT Act as e-retail booms

The State government is examining the possibility of revisiting the Value Added Tax Act, keeping the growing e-commerce business in mind. 

The government has begun the exercise of making amendments to the VAT Act so that there is no room for any ambiguity in the law to allow e-commerce business to thrive in the State.

I S N Prasad, Principal Secretary, Finance Department, told Deccan Herald on Monday that the Act would be amended not to help any one particular company, but to create a conducive atmosphere for firms to carry on with their businesses.

“The present laws have become obsolete and we need to amend them to allow e-commerce, because this particular business is going to grow and stay. In a city like Bangalore, people prefer to get their choice of goods delivered at their doorsteps. Companies which are into e-commerce have urged the government to amend the VAT Act keeping their nature of business in mind. We are at it,” he said. 

Asked whether e-commerce companies would be brought under the VAT net, Prasad said, “The question is not to draw up plans to earn more revenue. But the aim is to have a defined law for online business. Even when the GST comes into force, there should be a policy for e-business. We are not trying to amend the Act to give any concession to e-business houses. We may introduce the amended Act in the Belgaum session of the legislature.”

To a question whether there was a meeting between the State government and representatives of Amazon or its chief Jeff Bezos during his visit to Bangalore on Sunday, Prasad replied in the negative.

Asked whether the commercial taxes department has stopped issuing notices to dealers of e-firms, including Amazon, the officer said that the department is continuing its work. 

Already, several dealers have been served with notices by the department to stop their transactions through e-business firms. The department wants e-business companies to register themselves as dealers and not facilitators.