VAT on online products sold in Gujarat mostly from April

Ahmedabad, 1 December 2014

Gujarat Government has identified the online sales as the major grey area where it’s losing huge tax income and planned to levy tax from next financial year (1st April 2015).

At present there is no provision of levying Value Added Tax(VAT) on products sold online in Gujarat so taxes either goes to the state where the supplier is based or just the customer gets product without any taxes at cheaper rates.

The Gujarat Finance department’s top officials had the high level meeting with all the major online sales companies recently and decided to bring the online sales in the VAT ambit. Union Minister of State for Ministry of Commerce & Industry Nirmala Sitharaman also have raised concern over the revenue loss to the state and central government recently and hinted new tax norms for online retailers. Online Sales will be covered under the proposed GST(Goods & Service Tax) but till it comes in to force the Gujarat government has planned to levy VAT at the prevalent rates on online sales in Gujarat from April 2015.