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India e-commerce VAT doubts put Amazon on alert

  • VAT
  • 19 April 2015 | Richard Asquith

India e-commerce VAT doubts put Amazon on alert

Amazon has put e-commerce warehouse investment in the India state of Karnataka on hold over concern for the Indian VAT treatment of distance selling.

For over a year, it has not been clear if Amazon would be treated as a legal partner in a transaction between customers and its online merchants. This would mean Amazon becoming responsible for levying VAT on transactions, collecting it and paying on to the tax authorities.

Amazon does not consider itself as an agent in the chain when they are providing fulfilment services, so has disputed the interpretation taken from the tax authorities.  As a result of the continuing doubts over the correct Value Added Tax treatment, Amazon has stopped new investments in the state in warehousing facilities.

India is reforming its antiquated VAT rules with the launch of Indian GST potentially in April 2016.  This will replace VAT, Service Tax and many other overlapping taxes.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.