Regulatory issues with Amazon resolved: K'taka tax dept

Written By Unknown on Jumat, 12 Desember 2014 | 08.10

Amazon says it is working to put this problem behind it, saying it's more a case of bad laws, and less about non-compliance.

Amazon may be participating in google's shopping jamboree, but the american e-commerce major is still facing some major tax hurdles in Karnataka.

E-retail giant Amazon is having a tough time navigating the indian regulatory rain forest.
It all started in july 2014 when Karnataka's commercial tax department issued notices to over 100 third-party merchants to stop storing their products in amazon's warehouse in bengaluru. When no response was forthcoming within set deadlines, the department took the next step - it sent out notices canceling the licences of these dealers. Now, however, karnataka's chief minister says this particular tussle between the tax department and the e tailer will be resolved soon.

Siddaramaiah, Chief Minister, Karnataka said, "There is no issue. We will settle it. There is no problem. We have already discussed with the people of Amazon."

The state government may be optimistic about a quick resolution, but the state's tax department says the e-tailer has neither paid value added tax, nor sales tax on many of the transcations. On its part, Amazon says it is working to put this problem behind it, saying it's more a case of bad laws, and less about non-compliance.

Its statement to CNBC-TV18, Amazon management said, "We have been working with the relevant authorities to address their concerns. We understand this to be a case where the laws have not kept pace with the new-age online business models that enable a faster, convenient and nationwide access to customers for sellers, especially small and medium businesses, at significantly low costs. We await a resolution."

For the moment, the tax department has not prevented Amazon India from operating its warehouse in Bengaluru, and experts say the state government could play ball, as it will not want to see the e-tailer heading to another state. But the very fact that Amazon has been living on the edge for a prolonged period of time does not bode well for India's aspiration to rise up in the ease of doing business rankings.


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