Karnataka government to examine tax evasion by e-commerce companies in Karnataka
BENGALURU: The Karnataka government will examine all allegations of tax evasion by e-commerce companies which reportedly caused the state exchequer an alleged loss of Rs 2,000 crore.
“We won’t exempt any e-commerce company or online marketplace from payment of value added tax. We’re not under pressure to leave out any e-commerce company, including Amazon India, from tax payment. We won’t spare anyone if irregularities are confirmed,” chief minister Siddaramaiah told the legislative assembly on Monday while replying to a discussion on the budget.
He also said strict compliance measures initiated by the commercial taxes department after the Amazon India controversy have yielded results. “Many companies have fallen in line,” he said
He said the state government had issued notices to many online marketplaces like Flipkart, Amazon India, Alibaba and Myntra, among others. “Most have responded favourably — Flipkart alone paid Rs 226 crore in tax this year,” he added.
The commercial taxes department is closely examining the Amazon case. “VAT is the bread and butter of the state. No business transaction should happen without VAT payment. I’ll get the case thoroughly reviewed and not succumb to any pressure or influence, no matter how big the company,” the CM said.
Siddaramaiah denied the opposition’s allegations that the government had transferred commercial tax commissioner Ajay Seth, who was in charge of e-commerce companies, for issuing a notice to Amazon. “He went on leave since he wanted to spend time with his only daughter when she prepared for exams. I requested him to continue till the current financial year but he was reluctant,” he said.
He also allayed fears of opposition parties on revenue collection dipping in the state and said Karnataka is No. 1 in tax collection in the country. “I’m proud to say we’re way ahead in revenue collection among all southern states,” he said.
During the debate, Kumaraswamy had last week alleged he had noticed a sizeable drop in VAT collection in 2014-15 although 132 e-commerce companies, including Amazon and Flipkart, operating in Bengaluru had a flourishing business.
He alleged the state government lost Rs 2,000 crore in tax revenue. Instead of reining in erring companies, the government, under pressure from some senior Congress leaders, had reportedly asked a senior bureaucrat (Ajay Seth) in the commercial taxes department to go on leave for trying to bring these companies under the tax net, Kumaraswamy said.
Amazon India had caught the attention of commercial tax authorities in Karnataka following reports of non-payment of VAT for transactions on its online platform.