Flipkart Challenges E-Commerce Entry Tax in Gujarat High Court

Gujarat High Court Thursday issued a notice to the state Government on a petition filed by the online retail major Flipkart against the entry tax in the state on the goods bought through the e-commerce portals.

The division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi scheduled the next hearing for June 9.

Flipkart has claimed the tax is discriminatory, because no such tax is imposed on the goods brought into Gujarat through other modes of sale.

It moved the HC after the Gujarat Government amended the law to levy entry tax on goods purchased through e-commerce portals, apparently to provide a level-playing field to the traders and retailers in the state.

The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed on March 31. Now 15 percent entry tax is levied on the online purchases.

Flipkart's contention is it does not sell any product itself but only provides an online platform to manufacturers/traders, so the tax is unjustified.

The new law amends the word "importer" to cover those who "bring or facilitate to bring any specified goods for consumption, use or sale in Gujarat from any part of the country using online platforms."