Tax evasion by some ecommerce firms leads to a new mandate by the Delhi Government

On one hand, ecommerce is blooming and on the other hand some people are adopting illegal practices to avoid paying taxes.

Ecommerce is making lives easier for a lot of us, but did you know that some ecommerce firms are collecting taxes from you on behalf of the Government, but are not depositing it with the Government?

Hence, the Trade and Tax Department has made it mandatory for ecommerce companies to deposit their due tax, along with their transaction details.

“In the financial year 2014-15, it came to our notice that some ecommerce companies selling goods through online portals were not depositing their due tax that they owe to the department. They used to collect tax from the consumers but did not deposit the money with Government,” a senior official said.

As ecommerce is a fast growing sector, the department felt the need to regulate these dealers so as to bring them under the ambit of VAT. Owing to which, the Delhi Government has made it mandatory for all ecommerce companies to file their transaction details on the website of the Department of Trade And Taxes while paying tax.

It aims at regulating all dealers and sellers engaged in selling goods via online portals. The Trade and Tax Department also held a meeting with representatives of ecommerce web-portals to clarify the process of tax collection and addressed their issues.

From now on, ecommerce companies need to log on to the Government website — — to enroll and pay their taxes.

“Non-compliance of the notification shall be treated as violation, which attracts penalty of Rs. 50,000, under section 86(14) of Delhi Value Added Tax Act, 2004,” the official added.