Hyderabad: The governments of Telangana State and Andhra Pradesh are focusing on e-commerce companies to increase their revenues.

While the TS government wants to stabilise its revenue at least in Hyderabad, which contributes to more than 65 per cent of revenue through sales tax, the AP government is looking at tying up loose ends and new ways to generate revenue.

Governments are now focusing on e-commerce companies, which are under the scanner of the respective commercial tax departments.

Enforcement teams of the commercial tax departments had carried out inspections and raids at courier service points and other facilities used by e-commerce firms for products delivered about 20 days ago. Following this, senior officials had called the representatives of the companies to furnish transaction data.

“We did only a sample examination of large transactions of e-commerce firms. However, we intend to scan the transactions of other companies. Under the Value Added Tax (VAT) law, the transactions involving dealers of TS, irrespective of whether the product was delivered to a customer within the state or to someone outside, are taxable here. We want to see if such transactions, handled by the e-commerce companies, comply with our tax provisions,” said V. Anil Kumar, commissioner of the state commercial taxes department.

In the sample verification, officials verified over 200 large transactions of Flipkart and Amazon involving local dealers. They mostly use dealers to place and deliver orders.

B.R. Meena, principal secretary for revenue, said that the perceived revenue loss on account of non-compliance of e-commerce business would be a few crores.

The AP government has similar plans.  “The government wants all e-commerce firms to pay up, whether they call themselves dealers, aggregators, retailers, facilitators or commission agents. As per the law, tax should be paid at each point of value addition. The government has also asked e-commerce firms to come up with options to comply with the VAT law,” said the AP state commercial tax department’s additional commissioner.

A finance department official said that e-commerce is still in its infancy in India and the government wants to deal with it before it becomes a major issue.

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