The State Government of Uttarakhand on 9 November 2015 amended the ‘Uttarakhand Tax on Entry of Goods into Local Areas Act, 2008’ (the Act) to provide for a special mechanism for collection of entry tax on specified goods purchased online or through e-commerce platforms. Under the proposed mechanism, a transporter/ courier or any other person including an importer bringing such goods, whether on his own account or on behalf of any other person, would be liable to pay entry tax, as may be notified.
By making transporters/ courier agents liable for payment of entry tax, the government has tried to widen the collection base so as to plug any possible evasion of entry tax.
Vires of the Act is under challenge in Uttarakhand High Court. Further, as goods sold on e-commerce platform would be liable to pay entry tax, such players may explore options to mitigate the new found tax burden.