The Gujarat High Court today disposed of a set of petitions filed by e-commerce players Flipkart, Amazon, and Instakart challenging the entry tax imposed by the state government on the goods purchased through e-commerce portals.
A division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi disposed of the petitions in view of a recent Supreme Court judgement, which upheld the validity of entry tax imposed by the states.
The high court, however, allowed the petitioners to approach the relevant adjudicating authorities for raising procedural matters arising from the imposition of entry tax.
The Supreme Court had last month upheld the constitutional validity of the state legislations with regard to the levy of entry tax on goods coming from other states, ruling that tax legislation by the state does not require the consent of the President under Article 304 of the Constitution.
Flipkart Internet Pvt Ltd, Amazon Seller Services Pvt Ltd, and Instakart Services Pvt Ltd had in April and May moved the high court with petitions challenging the imposition of entry tax by Gujarat government on goods purchased on e-commerce platforms.
The petitioners claimed that the state government's amendment to the law to levy entry tax on goods purchased through e-commerce portals was discriminatory as no such tax is imposed on goods brought into Gujarat through other modes of sale.
They argued that they only provide online platform to manufacturers, traders and buyers and are themselves not involved in selling any product and hence the tax is unjustified.
However, the government had argued that it was done to provide a level-playing field to traders and retailers in the state.
The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, was passed on March 31 this year. From April 1, any goods being purchased online is being subject to 5 to 15 per cent entry tax. While normal goods are being levied five per cent tax, specified goods are subject to up to 15 per cent tax.
The bill amended the Act of 2001 to bring e-commerce transactions in its ambit, as it felt this was adversely-affecting local traders.
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.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)