There is a huge demand for online shopping in Kerala. Our state holds the ninth position in terms of e-commerce transactions in the country.
But of late, online shoppers in the state are not able to place order as many of the country’s leading online shopping sites which previously had delivery here, stopped services. When shoppers try to place orders, they are greeted with a message that they cannot ship the product to buyer’s location due to logistic partner’s shipping constraints.
The reason behind the suspension of service in Kerala is due to the new ‘Sales Tax policy’ imposed by Kerala Sales Tax department on these online shopping sites.
Online e-comm shopping sites save about 5% on sales tax. And the Sales Tax department stated that, e-commerce sites cannot operate in Kerala without paying the tax.
However, online shopping sites argue that that they sell products at a discount of 5% of the market price. And with the new tax policy, e-comm sites will not be able to sell products at a discount to their customers. Some online shoppers allege that Sales Tax Department’s new tax policy is to mainly help local apparels and electronic shops in the state.
Flipkart, Myntra and even Amazon are the major online shopping sites that stopped Kerala operations. Earlier, Snapdeal and Shopclues also suspended their service here but they solved issue. It is learnt that, Flipkart does have delivery in some districts like Kochi and Thrissur through ‘Flipkart Ekart’ service Flipkart’s own logistic service.
Different states have different taxes policy. Since e-commerce stores don’t have a physical location, it become difficult to assess taxes when they handle lakhs of orders. E-comm sites have been asking for a uniform tax policy for e-commerce across the country but no decision has been taken so far.
As standoff between the sales tax department and e-commerce companies continues, online shoppers in the state are left with no choice but to wait. The logistics companies are in constant dialogue with the authorities to resolve the issue. Let’s hope that the issue will be solved soon.
If reports are true, some people, living in border districts like Trivandrum, have started going to nearby states to take delivery.