Online Retailing Giants like Amazon, Flipkart and Snapdeal etc were in a big shock after Telangana government issued notices to them to pay sales tax/VAT for all the products they sell in the state and threatened to cancel their licenses of traders in Telangana if they do not oblige.
Online business do not pay up taxes to Telangana despite making sales here. Also due to the cheap rates they sell, purchasers do not opt for sales in shops and shopping malls which duly pay their taxes to the government. In either way, the state is losing due to online sales.
Recently, Karnataka government also cracked whip on online retailers in the same issue and Telangana government is studying the process. Out of Telangana’s total tax receipts of `35,378 crore, the sales tax alone contributes Rs 26,963 crore. Government is also planning to amend laws to bring online trading firms under the ambit of sales tax norms.
