Online shopping has come to a stand still in Kerala. The sales tax department in Kerala doesn’t allow companies like Flipkart and Amazon to sell in the state without paying sales tax.
E-commerce companies save about 5 % on sales tax. According to one report (Malayalam), because of the standoff between the sales tax department and e-commerce companies, companies have stopped taking new orders from Kerala (h/t:@nikhilnarayanan).
Existing orders are stuck in transit for the last few days. When you type in an address from Kerala, you get a message that the item can’t be delivered in the state.
A few people, living in border districts like Trivandrum, have even started going to nearby states to take delivery.
Different states have different taxes (and there are central and state levies). For e-commerce stores that don’t have a physical location, it becomes difficult to reconcile all these taxes when they handle lakhs of orders.
Companies have been asking for a uniform tax regime for e-commerce across the country but that seems far away for now. For e-commerce companies within the state, this comes as a boon.