After Karnataka, Uttarakhand and Uttar Pradesh state governments, it is Punjab State government’s turn to spread the online tax web. And predictably, not everyone is happy.
Brick-and-mortar retailers across the country have been nursing a grouse against online marketplaces from long. Therefore, whenever news of a State government levying tax on ecommerce businesses or online purchases comes out, retailers grin from ear-to-ear.
Needless to say, traders of Punjab’s wholesale computer market are extremely happy with state government’s decision to charge trade tax on online purchases.
Expressing his delight, Varun Gupta, a trader said, “Sale of products of e-commerce websites is tax free in Punjab, where as we have to pay VAT on our sales. That’s why they manage to sell the products at such low prices. Moreover, striking bulk deals with IT brands gives them an upper hand. Due to this, the retail and wholesale sales have gone down by 20 to 25% here. Levying trade tax on online purchases is a welcome move and I think it should be implemented as early as possible as it will bring stability to our trade.”
Another wholesaler Deepak Dhawan said,
“I think this step will revive Ludhiana’s wholesale market which was suffering badly as due to low prices offered by e-commerce websites.”
One would assume this tax decision would make all traders happy but garment dealers aren’t one of them. They feel ecommerce has been instrumental in increasing their business and online trade tax will slow down the growth.
“E-commerce has acted as a very important tool for us to reach markets where we were not able to reach on our own. If the state levies a tax on customers, it will definitely stop customers from buying garments online as it will cost them more than the price at what it is actually available in the local market,” said Varun Kalra.
Burdening customers with additional tax will definitely affect online sales in Punjab, which is one of the biggest ecommerce markets. Tax restrictions in UP is already eating online marketplaces’ profits. With Punjab added to the list, online business in another North-Indian state will suffer too.
“I think it is a wrong decision, as there are several products which are available at online portals only. When they will not be available in the market, how will traders here benefit,” reasoned an online buyer Vikrant Vig.
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