CHENNAI: The Tamil Nadu Commercial Taxes Department has strongly warned e-tailers in the State to declare all their turnover from online sales and remit due taxes on their e-commerce sales.
In a statement here on Wednesday, the department also reminded them of the penalties due for tax evasion. The statement, which follows Union Minister of State for Commerce and Industry Nirmala Sitharaman’s statement on Flipkart’s Big Billion Sale on Monday, brings into focus the need for better monitoring of the burgeoning e-commerce sector in the country.
Noting that recent investigations had revealed that certain e-commerce dealers had indulged in tax evasion, the department said that these dealers had not paid the Value Added Tax (VAT) due to the government from online sales.
“These (dealers) have not paid VAT due thereon to the government on sales effected through e-commerce portals,” declared the statement.
It also revealed that one particular retailer, who wasn’t named in the statement, had made sales online for several crores of rupees, but had reported only a small portion of the turnover to the government. “Legal action is being pursued in this case to collect the tax due, including interest and penalty,” said the department.
“Dealers involved in e-commerce are hereby cautioned to disclose and pay VAT and Central Sales Tax due on all transactions through e-commerce portals promptly, failing which punitive action will be taken as per penal provisions of TNVAT Act 2006,” the department warned.
TN VAT is payable on online purchase of all goods, including downloaded software, e-book, songs etc., by a consumer in Tamil Nadu from an online retailer delivering goods from Tamil Nadu, while Central Sales Tax is payable in case the online retailer delivers goods from Tamil Nadu to a consumer in another State.
The Department is now verifying bank transactions made on portals to ensure that there is no suppression of sales and legitimate tax is remitted to the government as per the provisions of the Act. Consumers have also been urged to insist on tax invoices containing name, address and the Taxpayers Identification Number (TIN) while making their online purchases. “This also enhances a consumer’s rights by having legal title of goods in case of default,” the department pointed out.