CHENNAI: Tamil Nadu's tax officials have deferred their plans to amend the state's Value Added Tax (VAT) laws which were aimed at taxing all e-commerce transactions, as the new uniform Goods and Services Tax (GST) expected to come into effect by April 2016.
According to an official Tamil Nadu's commercial taxes department: With GST likely to be rolled out from April 2016, we expect e-commerce to get attention from the policy makers in the next few months and hence amendments in state tax laws are not a priority right now.
Earlier, e-commerce companies faced scrutiny from tax authorities of various states who believed that e-commerce market places like Flipkart and Amazon were acting as agents for the vendors selling through their portals and hence should come under the tax net.
The GST bill, which was approved by the Lok Sabha, is expected to rationalize complex tax regime and remove cascading impact of taxes. GST, if passed by Rajya Sabha, will subsume excise, state value-added tax (VAT), service tax and entry tax among other levies, an ET report said.
Industry watchers expect GST to end tax woes of e-retail industry as it would subsume the existing archaic tax laws and may lay down a clear framework specific to the industry getting rid of the various interpretations and differential tax structures that plague the sector currently, the report further added.