Jammu and Kashmir government on Monday introduced a bill in the state Assembly, seeking taxes on goods entering the state through e-commerce portals with the aim to safeguard local traders and the tax collection system.
Jammu and Kashmir Entry Tax on Goods (Amendment) Bill was introduced in the state Assembly by Finance Minister Haseeb Drabu with an eye to tap the changing trade practices and enhance the revenue collection on account of entry tax.
“As per section three of the Entry Tax Act on Goods Act, 2000, entry tax is collected on goods the value of which exceeds Rs 5000. With a change in trend in business techniques online shopping has become common and consumers prefer buying goods from various companies delivering them at the destination booked through their online portals.”
- GST: GoM suggests April 1 date to rollout e-way bill system
- E-way bill rollout deferred: Technical glitches in implementation confirm industry fears
- FCRA amendment in finance Bill to help BJP, Congress escape scrutiny
- E-way bill: An electronic system to track goods movement, a way to plug leaks under the GST framework
- Goods and Services Tax — E-way bill: Key to plugging revenue leaks
- GST Council decides Feb 1 rollout of e-way bill system
“Statistics collected from the minor checkpost (passenger side only) show that most of the consignments are shown below Rs 5000 and hence no entry tax can be levied. In case of the passenger side minor checkpost at Jammu Railway Station only, per day billing of consignment below the value of Rs 5000 is Rs 15-18 lakhs,” the minister said in the statement of objects and reasons for introducing the bill.
Further, he said the local trade was being hit by such transactions and the dealers dealing in sale and purchase of mobile phones had approached Commercial Taxes Department and represented that the online invoices being competitive have taken over the market as they do not pay any tax and incur any other incidental expenses.
“It is also apprehended that the online delivery is split into several bills so as to reduce the value of invoice to avoid entry tax,” the minister said.
“For example, if consumer has booked goods for Rs 20,000 and has sought delivery of five goods, separate five invoices showing the value of goods below Rs 5000 value are issued,” he added.
In this backdrop, he said the government may think of doing away with the limit for levy of entry tax or reducing the same so as to enhance the tax base and boost revenue collection.
“If we enhance the taxable imports of Rs 15 lakh per day, we will get additional revenue on account of entry tax about one lakh per day which comes to Rs 30 lakh per month and Rs 3.50 crore per year from passenger side only,” Drabu said.
He said huge quantity of such online goods is cleared at airports of Jammu and Kashmir and at Lakhanpur, bordering Punjab.
“This resource needs to be trapped looking into the changing trade practices of the companies,” he said.
The minister said more big business houses are in a process of resorting to the same kind of trade practice which would further have the affect of giving a jolt to “our tax collection”.