The Gujarat state government made an amendment in the state’s tax on March 31st, 2001 on the Entry of Specified goods in the local area.Flipkart is an ecommerce industry where the sellers and buyers can meet in one platform, the sellers can display their products and the customers can place their orders. The website is only a medium where the buyers and sellers make their business transactions. This online company filed a petition against the Gujarat state government for imposing the entry tax on the goods sold in the state through the online shopping. In the State financial budget for the financial year 2016-17 the Gujarat government introduced the entry tax on ecommerce businesses. And the government ordered the online company to differentiate the VAT between Gujarat and the state from where they supply the product and vice versa.
The company filed a petition in the Gujarat high court under R S Reddy, the Chief Justice and V M Pancholi, the Justice regarding the tax imposition. The company said that they registered all the sellers in their business, according to the state Value added tax CST (Central Sales Tax).Dhaval K Shah, the advocate of Flipkart submitted the list of sellers and their registration under the Value Added Tax CST, and also said that the detail can be found on the website. The sellers outside the state also pay their respective Central sales tax. The advocate also said that the company is only a medium for managing their logistics, because the sellers hand over the invoice and the particular product to the logistics department to deliver it to the customer.On hearing the case, the Gujarat high court ordered the Sales tax Commissioner and the state government to respond to the petition by June 3rd, 2016.