The UP Government has set a new law that has mandated online buyers to file a VAT declaration along with the registration number of the vehicle which is bringing the product, if the product exceeds Rs 5,000 in value. Thus, many firms are setting up seller base and warehouses within the state.

E-commerce players including Amazon, Flipkart have stopped shipping products that value more than Rs 5000 to Uttar Pradesh.

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The reason is that the state Government about six months ago, set a new law that has mandated online buyers  to file a VAT declaration along with the registration number of the vehicle which is bringing the product within the state borders, if the product exceeds Rs 5,000 in value. This has obviously brought in reluctance thus almost ending the shipping of expensive items to the consumers.

The online retailers have claimed that more than 60% of the sales is generated from Tier 2 and Tier 3 cities. To combat this law, many firms are setting up seller base and warehouses within the state.

[source]

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