AKITDA Plays Role Model for IT Associations in India against e sales

With price parity issue becoming a cause of concern for IT channels, the IT associations pan India is taking all measures to stop the price issue at the hands of e-commerce industry. As there is zero taxation policy in online shopping, products are sold at cheaper rates, ultimately curbing the tax benefit of the government.

To stop online shopping, Kerala has set an example for all other states of India after the services of the e-commerce players have been stopped due to state’s sales tax department in the state. Online shopping giants like Flipkart, Amazon and Snapdeal have stopped delivering products as delivery to the pincodes reflects No Delivery status and few orders have been stuck in transit.

The sales tax office feels that these e-commerce companies are able to discount their products by 5% because they don’t pay taxes in the state. To that context, Kerala Government is in favour of imposing Goods and Services Tax (GST) for the e-commerce industry too. The government is ready to support the Modi government who’s one of the objectives in their 2014 election manifesto was imposition of GST.

All Kerala IT Dealers association (AKITDA) along with other Kerala associations submitted a memorandum to the government to protect the interests of the dealers and the employees in the state. James Joseph, President, AKITDA informs, “Through our constant efforts and support from the market we issued a memorandum to the government and raise the issue of tax evasion and price parity in front of the minister. We submitted a detailed report on loss of revenue to Kerala. Controlling online shopping will not help IT and mobile dealers, but also lifestyle products dealers.”

Currently estimated at Rs.13,800 crore, online retail is expected to gallop to almost Rs.2.27 lakh crore in the next five years, according to a report by retail advisory firm Technopak. Following the suite J. Balaji, President, Erode IT Association tells, “We are in talks with the government and has also formed a committee to take this issue forward. Unlike AKITDA, we are also keen on stopping online shopping in Tamil Nadu. The dealers have been facing lot of problems in marketing their products in the region.”

All the IT associations are expected to come under one umbrella to approach government early next week (date yet to be confirmed) demanding policy reform. At the same time Vendor community also intend to support the move on co existence of both the mediums considering the changed dynamics of consumer buying while insisting on maintaining healthy channel eco system simultaneously.