CST to become a reality for e-tailers in Bihar

The state government of Bihar has recently announced that soon e-tailers, who earlier had been exempted from Central Sales Tax , will soon have to pay the CST to the state. CST is a form of indirect tax imposed only on goods sold from one state to another state, which particularly takes into account that the buyer and the seller needs to be in two different states.

The government has completed all legalities in this aspect and soon will be implemented. This move has been appreciated by the local dealers in the state and as well as IT channel partners.

Some state governments have asked e- tailers, who function as marketplaces to provide monthly sales data for vendors registered on their platforms.This would mean an added layer of scrutiny on companies such as Flipkart, eBay and Amazon India, all of which are structured as marketplaces that facilitate trades between buyers and sellers in order to stay in compliance with overseas investment rules.

State governments do not want to lose out on any revenue and are therefore seeking to ensure they get what's due to them.

Amazon India has been embroiled in a tax tangle with Karnataka. The local authorities had questioned its fulfillment centre model and sought to impose value added tax on goods sold through the site, treating it as a commercial agent, a claim the company has rejected. The case is currently in court.

The Delhi government wants ecommerce companies to provide details of vendors from elsewhere selling to buyers living in the state and vice versa. The state has said that the first return in this regard needs to be filed by July 20.