Lucknow: Online shopping in the state of Uttar Pradesh just got costlier with the government having approved a 5 per cent entry tax on all e-commerce purchases by consumers. The decision was arrived at a meeting of the state Cabinet under the chairmanship of chief minister Akhilesh Yadav.
As per the decision, the tax will also extend to courier services, though details regarding the same are yet to emerge.
The development marks UP’s entry into the league of states such as Bihar, Gujarat, West Bengal, Uttarakhand and Assam which also impose similar taxes on entry of e-commerce goods from other states. States like Madhya Pradesh and Rajasthan are also said to be mulling over the introduction of a similar tax levy.
Statutory requirements by tax authorities and alleged harassment has already kept India’s biggest e-commerce companies away from India’s most populous state. Flipkart, Amazon, Snapdeal do not deliver goods beyond a certain price limit to cities in UP, owing to these regulatory pressures.
The e-commerce market in the state is pegged at Rs 10,000 crore currently. With e-commerce companies already opting out of discount wars gradually, further hike in price could impact the market.
