by arvind singhal prime minister narendra modi recently remarked in japan that india now speaks in trillions rather than in billions there is at least one 1 trillion matter that he must direct his party and his bureaucrats to apply their minds too and keep rhetoric and dogma aside while they do so indias current consumer spending on merchandise and hence the size of indias retail market is about 550 billion by 2020 it will touch or exceed 1 trillion there are many drivers for this strong growth that go beyond the overall economic growth of the nation a young population convergence in lifestyle aspirations across urban and rural india rise of dual or multiple income households especially in urban india are some of the more wellknown growth drivers however there is also a new growth driver and one that could completely transform what india will buy from where it will buy and how it will buy and that new growth driver is ecommerce and for merchandise it is etail a ticking bomb what started no more than 10 years ago as a new and more efficient platform to sell books and music has now gone way beyond the traditional merchandise categories that are sold online there are now housing launches tata new car launches mahindra jewellery including expensive solitaires and healthcare dna testing to list a few creative experiments with rapid increase in penetration of smartphones and the new governments renewed thrust on making broadband reach far and wide through its digital india project enetworks are expected to be the new bank branches schools and colleges and shopping and entertainment centres in this backdrop taxation jurisdiction and taxation applicability issues such as the one that is currently vexing both the karnataka tax authorities and amazon are poised to flare up in just about every state in india and create frequent obstacles not only for private businesses such as amazon and flipkart and many others but also the governments own initiatives that endeavour a digital platform aided delivery of goods and services to be fair to the tax authorities both at the state and the centre the spectacular rise of ecommerce in india has taken just about everyone by surprise other than the diehard ebusiness evangelistsentrepreneurs and the indian consumer unlike the traditional supply chains of distributing goods and services from producers to the consumers the ebusiness models and ebiz supply chains can be very different the socalled market place model is perhaps no different in concept than the classified advertisement listings in print media and yellow pages earlier and the managed inventory models make some of the etail businesses look more like warehousing and delivery businesses rather than classical retail businesses with this blurring of lines about ownership of merchandise the location of physical stocking the place where actual transaction takes place and the actual point of delivery can rightfully be any tax administrations nightmare and especially in a federal structure such as the one that we have in