Flipkart, 3 other e-tailers slapped Rs54-cr fine in Kerala

The commercial taxes department in Kerala has slapped a fine of Rs53.63 crore on four online trading companies, including Flipkart and Jabong, for allegedly doing illegal business in the state.

E-commerce major Flipkart has been asked to pay a fine of Rs47.15 crore, Jabong.Com Rs3.89 crore, Vector e-commerce Rs2.23 crore and Robemall Apparels Rs36 lakh, for the year 2012-13 and 2013-14, the intelligence wing of the commercial taxes department said in an official release today.

Meanwhile, reports in local newspapers said Flipkart, Jabong, Vector E-commerce Pvt Ltd (which has a stake in Myntra) and Robemall Apparels Pvt Ltd (which operates garments retailer zovi.com) have come under the scanner of the tax department.

In a sign of continuing tax trouble for e-commerce, the sales tax department has said the companies have been penalised for evading taxes for the last two years and that they are looking at other online retailers too.

Tax officials justified the move, saying that though these online retail companies do not have physical showrooms, their web sites, where they display the products and prices, serve the purpose. Since these companies sell the products to the local customers, regional taxes are applicable, reports quoted the officials as saying.

''While the products are being delivered to the customers, we treat it as local trade. Even though the purchases are being done through virtual platforms and not directly from showrooms of these companies, these transactions are taxable. We have the legal backing to tax these purchases,'' The New Indian Express quoted an official as saying.