Recently the Indian Government introduced VAT on all sales done by e-commerce sites like Flipkart, Snapdeal, Amazon, etc.
Also, foreign direct investment, or FDI is restricted, specially in the retail sector.
Under an older policy, India did not treat e-commerce as Retail, hence FDI was permitted in this sector without impediment. However, since e-commerce has now been recognized as ‘retail acitivty’ by the Government, changes things.
Asking the Government to clarify their position, hearing a petition, Delhi High Court Justice Rajiv Sahai Endlaw said “ Prima facie, the Union of India/State Governments cannot, on the one hand, for the purpose of tax, treat such sales as retail, and on the other hand, for the purpose of investment, not treat the same as retail sale..”.
