Kerala imposes Rs.54 cr fine on e-retailers

The commercial taxes department of the Kerala government has imposed a Rs.54 crore fine on some e-commerce companies and portals. More such companies will be fined, said a top official.

The department had Friday imposed the fine on Flipkart, Jabong and two other companies.

The department found that e-commerce transactions of online trading companies violated the Kerala Value Added Tax Act 2003 and similar tax rules.

"What came yesterday (Friday) was just the beginning. The big ones like eBay and Amazon are all going to follow suit...many more are soon going to be penalised," said the official who did not wish to be identified.

The fine slapped Friday was for the years 2012-13 and 2013-14.

"See, we have served notices to all such companies and all of them have cooperated with us....Kerala is the first state where such a massive exercise is being undertaken," added the official.

Speaking to IANS, Jose Jacob, director of the Gulati Institute of Finance and Taxation, an autonomous research Institute set up by the government of Kerala, said they will be submitting a preliminary report on this subject next week.

"We have found out that e-commerce transactions in the state are going up dramatically.... We have estimated that the state loses around Rs.1000 crores every year and this figure will increase if adequate mechanisms are not in place. One way to get rid of this is to see that the Goods and Services Tax is implemented," said Jacob.