Published On: Fri, Oct 23rd, 2015

Shipping complications making it difficult for top ecoms like Amazon, Flipkart and Snapdeal to do business in Uttarakhand

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If you live in India’s most populous state Uttar Pradesh and order a new smartphone from Flipkart, Snapdeal or Amazon, it most likely won’t be delivered to your home.

The three online marketplaces have virtually stopped delivering products exceeding Rs 5,000 in value to customers in UP and Uttarakhand, citing harassment by tax authorities over a form that buyers are required to furnish when purchasing goods from other states.

As per the UP tax law, any person who intends to bring or receive goods from outside, other than those specifically exempted, is required to furnish a declaration that must accompany the goods during their movement in the state. This is mandatory for foods of any value being transported by truck, specified goods used in construction such as sand worth more than INR 1000 and other goods with a value exceeding INR 5000.

Although, the rule is applicable to all, ecommerce companies that do not have fulfillment centers or use vendors from outside the states, have begun to face the heat.

“Owing to these statutory restrictions imposed by the UP government, we do customer deliveries for shipments only up to Rs 5,000, which is for interstate shipments,” a Flipkart spokesperson said in an e-mail.

Flipkart spokesperson added that Uttarakhand too has similar VAT regulations in place which is why they had to dismiss deliveries in the state. Earlier, Flipkart faced the same issue in Bihar which later subjected to payment of entry tax.

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