After getting a stay from the Uttarakhand High Court over the issue of entry tax, Flipkart has sued the government of West Bengal over a similar issue. The e-commerce firm has also managed to get a favourable judgement from the Calcutta High Court, which could act as a deterrent for other states that are in the process of imposing entry taxes on goods bought online.
The petition has been filed by Instakart Services that runs the logistics arm of Flipkart, EKart. The petition, reviewed by ET, alleges that the West Bengal government is imposing an entry tax of 1% on the value of each consignment which is being delivered by eKart in the state. Flipkart has argued that the levy of entry tax is without any “legal” basis. “It has also resulted in increased cost of goods and materials brought into the State of West Bengal by them for consumption or use by the end customers in the State,” said the petition, which was filed in the last week of March.
The state had mandated advance payment of 1% entry tax as a prerequisite for generation of “waybills” – a requirement for delivery of shipments. In an order dated April 5, the court has said that the state cannot insist on the payment of entry tax. “As a consequence, the petitioner will be entitled to generate waybills in terms of the said rule without payment of any entry tax and if the programme or the system has to be altered for such purpose, the state is directed to do so immediately such that no inconvenience is occasioned to the petitioner in the electronic generation of waybills without payment of entry tax,” said the order, a copy of which was reviewed by ET.
The state of West Bengal on the other hand had argued that since matters of similar nature from other states have reached the Supreme Court, it has applied to intervene before the apex court so that the propriety of entry tax can be decided at the highest level. A Flipkart spokesperson said in an emailed response that the stay order by the Calcutta High Court will benefit the consumers of the state who were paying additional tax for products bought online till now. “Hearing on the petition filed by Flipkart, the court has put a stay on the collection of entry tax on the goods entering the state of West Bengal. The collection of entry tax was anticonsumer and was reducing the benefits of ecommerce for the residents of West Bengal,” added the spokesperson. ET had reported in March that Flipkart sued the state of Uttarakhand for its decision to impose a 10% entry tax, calling the levy “discriminatory”.Share This