Relief for Flipkart: Calcutta HC stays entry tax on online shipments
While most states are busy imposing taxes on goods bought online, the Calcutta High Court has stayed the state government’s order to levy 1% entry tax on the value of each consignment delivered by the Indian e-commerce giant, Flipkart in the state. This decision came after Flipkart challenged the West Bengal government's directive to impose entry tax on online goods.
Instakart Services, the logistics arm of Flipkart had earlier filed a petition with the Calcutta High Court, which claimed that the West Bengal government has been imposing an entry tax of 1% on the value of every consignment that eKart delivers in the state without any "legal" basis.
As reported by ET, the petition further mentioned that this move of the state government has also resulted in an increased cost of goods and materials brought into the state by them (Flipkart) for consumption or use by the end customers.
The West Bengal government had mandated an advance payment of 1% entry tax as a prerequisite for generation of "waybills".
In its order dated April 5, the Calcutta High Court has said that the government cannot insist on the payment of entry tax. "As a consequence, the petitioner will be entitled to generate waybills in terms of the said rule without payment of any entry tax and if the programme or the system has to be altered for such purpose, the state is directed to do so immediately such that no inconvenience is occasioned to the petitioner in the electronic generation of waybills without payment of entry tax," said the order, a copy of which was reviewed by ET.
A Flipkart spokesperson told ET that the court had put a stay on the collection of entry tax on the goods entering the state of West Bengal. The collection of entry tax was anti-consumer and was reducing the benefits of e-commerce for the residents of West Bengal