Tax relief for ecommerce in Tamil Nadu; VAT laws on hold for now

State governments as well as central government corridors have been buzzing about how/when/what to tax ecommerce. But at least one state has cleared their stand. Tamil Nadu state tax officers have decided against amending value added tax (VAT) laws for the time being.

Altering VAT laws was under consideration in order to tax ecommerce dealings. But it is on hold now as the new uniform goods and services tax (GST) is expected to come in effect from April 2016.

As per industry experts, GST will put an end to tax woes of ecommerce businesses as archaic laws will be eradicated to make way for contemporary law structure. A Tamil Nadu tax official revealed to a tabloid that as GST bill has been green signalled, next few months will witness ecommerce getting attention from tax policy makers and hence VAT adjustment doesn’t need immediate attention.

Ecommerce has been mired in tax controversies over the past year. Amazon faced Karnataka tax department’s backlash, only to get an all clear later on. Flipkart was under scanner too, post which the ecommerce giant raised concerns over government’s move to demand VAT.