VAT issue: JDS accuses Congress of favouring Amazon

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Bangalore | November 28, 2014 12:14 AM

The controversy over Karnataka's commercial taxes department, which has asked Amazon India...

The controversy over Karnataka’s commercial taxes department, which has asked Amazon India and its sellers to comply with the state VAT rules, has taken a political turn with Opposition Janata Dal Secular (JDS) alleging that senior Congress leaders are putting pressure on chief minister Siddaramiah to exclude the etailer from the purview of VAT.

The JDS, in a recent press conference, alleged that the state’s commercial taxes commissioner, Ajay Seth, had gone on leave earlier this month because of this. When contacted by FE, the officer said that the allegation was false and that he had applied for five-month leave in early October to honour some personal commitments.

“My going on leave was an unrelated event,” he said.

The commercial tax department views Amazon as a commission agent and wants it to pay VAT on behalf of the sellers.  Amazon maintains that it merely provides a platform to third-party merchants and does not own the inventory and so is not liable to pay VAT.

The department has issued notices to 75 vendors on Amazon’s online marketplace for registering the e-commerce player’s fulfilment centre as an additional place of business.

Tax experts have opined that Amazon is a pure service provider and, therefore, not liable to pay VAT.

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