A penalty of INR 47.15 Crore was imposed on Flipkart while others like other like Jabong was fined 3.89 Crores, RobeMall which operates Zovi was fined for INR 36 Lakhs and Vector eCommerce which has stakes in Myntra was fined with INR 2.23 Crores.
Sale of products by online firms to regional customers is considered taxable in Kerala as the firm’s online store is considered as their showroom. The State Government had also banned Cash-On-Delivery services by these eCommerce players last year. Offline retailers who sell a major chunk of product in Kerala have also complained against online players evading taxes in the State.
eCommerce firms being under the scanner for tax evasion is not new in India. This incident has brought many other eCommerce players under the State Government’s radar. Earlier this year, Flipkart was fined by the IT Department with INR 23.51 Crores for not depositing their taxes which they collect from the end users. Amazon was also banned by the Karnataka government from selling products from their Bangalore warehouse or charges of evading taxes.