Gujarat High Court dismisses plea of e-commerce firms over entry tax but gives some relief

New Delhi, Dec 3 (KNN) In a setback to the e-commerce giants, Gujarat High Court has dismissed petitions filed by e-commerce giants - Amazon Sellers Services Pvt Ltd, Flipkart Internet Pvt Ltd and Instakart - challenging the state government's notification over levying entry tax on goods sold in Gujarat through online shopping.

However, in what could provide some relief to the online players the Gujarat High Court has allowed them to reduce that tax liability to the extent of central sales tax paid in the state of origin.

The order was passed by a division bench of Justice MR Shah and Justice BN Karia of Gujarat High Court in a case relating to Flipkart and its group company Instakart.

This is in line with a recent Supreme Court judgement involving the company. Citing the verdict of a constitutional bench in the SC on November 11 the bench held that the state governments are empowered to impose tax on goods coming from other states.

A number of states led by Gujarat had imposed entry tax on goods supplied by ecommerce players from outside the state seeking to protect local traders and their revenues.

The e-commerce firms had challenged the “Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016” which was passed on March 31 on the ground that the tax is discriminatory as no such tax is imposed on goods brought into Gujarat through other modes of sale.