bangalore the karnataka government plans to amend the value added tax act to remove ambiguities surrounding ecommerce and bring its transactions under the tax net it wants the amendment to come through in the forthcoming winter session of the state legislature the government says the amendment will deal with what in ecommerce lingo is called the marketplace model which most players have in different measure in this model ecommerce players offer an online platform that retailers and buyers can use to make transactions the ecommerce players may also offer logistics and warehousing facilities to the sellers amazon in india has only a marketplace model but the same in flipkarts case is a small part of its overall operations because most of the sales are done by the company though through a different entity the players in the marketplace model say that since they do not directly sell goods vat should not be applicable to them but a state finance department official said since companies like amazon offer their platform and services for a commission even commission agents have to pay tax under the existing vat act both dealers and commission agents have to pay tax the state governments amendment is expected to clarify that ecommerce players will fall under that category the vat law is very clear those who sell on their own or those who sell on behalf of somebody acting as a commission agent are liable to pay taxes by splitting the business of selling and facilitating there is a misuse of law and evasion of tax hence we have proposed some amendments to deal with specifics so that there is more clarity on ecommerce activities said commercial taxes commissioner ajay seth the problem began with amazons warehouse in hoskote that was launched in january the dealers showed the amazon warehouse as their additional place of business or branch the government says this was done to avoid certain taxes the government wants all ecommerce firms to pay up whether they call themselves dealers aggregators retailers facilitators or commission agents as per the law tax should be paid at each point of value addition the government has also asked ecommerce firms including amazon to come up with options to comply with the vat law tax experts however warn that an already complicated tax system should not be further complicated the indirect tax regime is complicated enough said sandeep ladda india technology leader in consulting and audit firm pricewaterhousecoopers pwc one should make more accountable use of the existing indirect tax framework rather than introduce any new taxes this is a very high growth sector and one should find means to engage with the stakeholders of this ecosystem so as to enable overall growth and smoother and easier transaction flow so as to provide a boost to this promising industry he added for the resourceconstrained government though the prospects of additional revenue are mouthwatering certainly we can collect substantial revenue said the commercial taxes commissioner gst issue close to resolution